Bloomberg News

Russia's VTB Group Gets First Half of 200 Billion-Ruble Loan

October 24, 2008

VTB Group, Russia's second biggest lender, said it received half of a 200 billion-ruble ($7.35 billion) subordinated loan yesterday from the state development bank.

The money, which is aimed at boosting liquidity in the country's banking industry, will be provided by Vnesheconombank at an annual interest rate of 8 percent, VTB said in a statement distributed by the Regulatory News Service today. The loan must be repaid by the end of 2019. The remaining 100 billion rubles will be provided by the end of November, the statement said.

The funds will allow VTB to ``considerably strengthen'' the interbank lending market and ``ensure the stability of the Russian economy,'' Chief Executive Officer Andrei Kostin said in the statement.

The government has said it will channel $35 billion in subordinate loans to banks from Russia's foreign currency reserves and the central bank's own funds as part of a package of anti- crisis measures worth over $200 billion.

To contact the reporter on this story: Alex Nicholson in Moscow at anicholson6@bloomberg.net.

To contact the editor responsible for this story: Chris Kirkham at ckirkham@bloomberg.net


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