VTB Capital Said to Agree on Citic Tie-Up for China

(Corrects spelling of Wei Chen’s name in fourth paragraph. For more on the St. Petersburg forum, see EXT7.)

VTB Capital, the investment-banking arm of Russia’s second-largest bank, plans to expand in China through a partnership with Citic Securities Co. (600030), according to two people with knowledge of the matter.

VTB and Citic, China’s biggest publicly traded brokerage, may sign an accord today at the St. Petersburg International Economic Forum that is similar to ones the Russian company has with Grupo BTG Pactual SA (BBTG11) in Brazil and Evercore Partners Inc. (EVR) in the U.S., said the people, who asked not to be identified because the information isn’t public.

An official in Beijing-based Citic’s press office in Hong Kong declined to comment as did Moscow-based VTB Capital.

VTB Capital, which has offices in London, New York, Dubai, Hong Kong and Shanghai, hired former Deutsche Bank AG and Lehman Brothers Holdings Inc. banker Wei Chen to oversee its China coverage, including the partnership with Citic, one of the people said.

The investment bank has been expanding overseas following increased competition domestically from OAO Sberbank (SBER), Russia’s largest lender. Sberbank last year acquired Troika Dialog, Moscow’s oldest brokerage, for $1 billion and was second only to VTB Capital last year in organizing debt and equity sales, according to data compiled by Bloomberg.

VTB announced the alliance with its Latin American partner, BTG Pactual, last June following the Brazilian bank’s $2 billion initial public offering. Evercore, the advisory firm founded by former U.S. Deputy Treasury Secretary Roger Altman, signed an agreement in October with VTB Capital in develop deals between Russia and North America.

Citic last year agreed to buy Credit Agricole SA (ACA)’s stake in Asia-focused brokerage CLSA Ltd. for $1.3 billion and has set up a brokerage unit in the U.S. as part of its expansion. It also has partnerships with BTG Pactual and Evercore.

To contact the reporter on this story: Jason Corcoran in Moscow at jcorcoran13@bloomberg.net

To contact the editors responsible for this story: Steve Bailey at sbailey16@bloomberg.net; Hellmuth Tromm at htromm@bloomberg.net

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