(Updates with Bank of Moscow’s loan confirmation in second paragraph.)
Sept. 29 (Bloomberg) -- Russia neared completion of the biggest banking bailout in the nation’s history as VTB Group consolidated control of Bank of Moscow, allowing the government to disburse a 294.8 billion-ruble ($9.2 billion) 10-year loan.
VTB, the country’s second-largest bank, increased its stake to 80.57 percent and Bank of Moscow received the funds from the Deposit Insurance Agency, the lenders said in separate statements today.
State-run VTB bought the city government’s 46.5 percent stake in Bank of Moscow for 103 billion rubles in February, following President Dmitry Medvedev’s ouster of then-Moscow Mayor Yury Luzhkov in September 2010 amid corruption allegations. The bank will get a total of 395 billion rubles, including a capital injection of 100 billion rubles from VTB.
Bank of Moscow plans to invest its loan in a one-off issue of ruble-denominated government OFZ bonds. The Finance Ministry will be “technically ready” tomorrow to place the bonds, Interfax reported today, citing Deputy Finance Minister Sergei Storchak.
VTB’s shares climbed 3.1 percent to 6.9 kopeks at the 6:45 p.m. close in Moscow. Bank of Moscow advanced 5.3 percent to 894 rubles.
--Editors: Paul Abelsky, Torrey Clark
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