VTB Earns More Than Half of Russian M&A Fees in Shrinking Market

Russia’s VTB Capital said it earned at least half of the domestic investment banking fees for mergers and acquisitions this year as the nation’s companies retreat from overseas exchanges.

“We’re the champions of delisting,” Yuri Soloviev, VTB’s first deputy chairman, said in an interview at the investment bank’s annual conference in Moscow. VTB Capital, the investment banking arm of Russia’s second-largest bank, “accounts for more than half of the Russian M&A market, although granted it’s a smaller pie,” he said.

Investment-banking fees across the industry have shrunk to $130 million this year from $1.3 billion in 2007, according to Soloviev, as international sanctions over Ukraine and the collapse of oil prices curtail deal-making. Delistings are a rare bright spot, with the Kremlin urging companies to pull back from overseas stock markets after relations with the U.S. and EU soured following its annexation of Crimea from Ukraine last year.

The state-owned bank held its seventh annual Russia Calling forum this week, with more than 400 foreigners among 2,000 delegates at the conference, which included a question and answer session with President Vladimir Putin.

VTB is advising Wandle Holdings Ltd., controlled by the son of billionaire Suleiman Kerimov, in its prospective takeover of London-traded Polyus Gold International Ltd. The independent committee of Polyus’s board said in a statement Tuesday that Wandle’s $5.5 billion offer undervalues the gold producer. VTB is also helping Uralkali PJSC in its $1.3 billion plan to delist in London and Moscow.

Total fees paid by Russian companies have fallen more than 60 percent this year and are at their lowest since 2002, according to New York-based consultancy Freeman & Co.

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