VTB Drops to ‘09 Low as Most Cyprus-Exposed to S&P: Moscow Mover
VTB Group sank to the lowest level in more than three years as Standard & Poor’s said Russia’s second-largest lender is the most-exposed local bank to the Cyprus debt crisis.
The shares lost 2.3 percent to 4.79 kopeks by 2:46 p.m. in Moscow today, the weakest intraday level since September 2009. The amount of shares traded was about 26 billion, equivalent to 68 percent of the three-month average.
VTB has slumped 13 percent since Cyprus proposed taxing bank accounts to secure a 10-billion euro ($12.7 billion) bailout from the euro area. The island nation agreed to shut its second-largest lender and tax deposits of more than 100,000 euros on March 25. The “largest” share of nonresident deposits in Cyprus comes from Russia, and VTB’s Cyprus-based subsidiary, Russian Commercial Bank, holds the biggest portion among Russian banks, Standard & Poor’s said in an e-mailed note dated March 26.
Should Cyprus leave the euro region and devalue its currency, “the value of VTB Group’s and its management’s equity investment in Russian Commercial Bank would post a decline and result in a decrease in the group’s capital base,” S&P analysts said in the note.
VTB has $13.8 billion of assets in the country, Moody’s Investors Service said in a March 13 report. VTB Group may lose “only tens of millions of euros” in Cyprus, and its subsidiary contributes about 3 percent of the group’s total profit, according to a March 20 statement on the lender’s website.
To contact the reporter on this story: Ksenia Galouchko in Moscow at email@example.com
To contact the editor responsible for this story: Wojciech Moskwa at firstname.lastname@example.org