VTB Cancels New York Forum as U.S. Relations Sour

VTB Capital, the state-controlled Russian investment bank, has canceled its annual New York investor forum in April as relations with the U.S. deteriorate over the crisis in Ukraine.

The April 8-9 event will be rescheduled “to ensure the availability of keynote speakers and to confirm those dates that will be convenient for the forum’s target audience,” the Moscow-based bank said in a statement last night.

VTB Capital, a unit of Russia’s second-largest lender, received a license to trade stocks in the U.S. in 2011 and has the biggest presence of any Russian bank on Wall Street. Its second annual U.S. investor forum last April attracted almost 400 people, including 220 investors and representatives from 28 companies, according to the VTB Capital website.

Parent VTB Group’s shares, which fell 3.1 percent yesterday, were down 2.3 percent to 3.54 kopeks at 3:12 p.m. in Moscow after the Parliament in Crimea voted in favor of becoming part of Russia. The benchmark Micex index lost 1.2 percent as Western nations including the U.S. threaten Russia with sanctions over its military intervention in Crimea.

‘Capital Flight’

“These discussions clearly increase country risk for Russian banks, implying lower attractiveness of equity investment,” Olga Naydenova, a banking analyst at BCS Financial in Moscow, wrote in an e-mailed report. “Such discussions stimulate capital flight, triggering ruble weakness and interest rate spikes, which are negative for banks’ earnings.”

Photographer: Alexander Zemlianichenko Jr./Bloomberg

Parent VTB Group’s shares, which fell 3.1 percent yesterday, were down 2.3 percent to 3.54 kopeks at 3:12 p.m. in Moscow after the Parliament in Crimea voted in favor of becoming part of Russia. Close

Parent VTB Group’s shares, which fell 3.1 percent yesterday, were down 2.3 percent to... Read More

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Photographer: Alexander Zemlianichenko Jr./Bloomberg

Parent VTB Group’s shares, which fell 3.1 percent yesterday, were down 2.3 percent to 3.54 kopeks at 3:12 p.m. in Moscow after the Parliament in Crimea voted in favor of becoming part of Russia.

VTB’s shares slid 18 percent on March 3 after Russian President Vladimir Putin’s troop buildup in Crimea led to the biggest sell-off in Russian stocks for more than five years. A day later, the stock recovered 8 percent after Putin said he sees no need to invade Ukraine, while reserving the right to deploy the military to defend ethnic Russians in the region.

“We cannot and will not allow the integrity of the sovereignty of the country of Ukraine to be violated and for those violations to go unanswered,” U.S. Secretary of State John Kerry said yesterday after meetings in Paris with his counterparts from Russia, the U.K. and Ukraine.

VTB, headed by former diplomat Andrey Kostin, earned 15 percent of its 2012 revenue outside of Russia, according to data compiled by Bloomberg. VTB Capital is the biggest organizer of Russian equity and bond deals, the data show.

The lender, which was organizing a bailout to Ukraine before Ukrainian President Viktor Yanukovych was removed, said on Feb. 26 it had stopped lending to new clients in the country.

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

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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