The core capital adequacy ratio (N1.1) of Russia’s second-largest state-controlled bank VTB fell to 5.31% at the beginning of September 2024, close to the regulatory minimum of 4.5% excluding surcharges, Kommersant daily reports citing the bank’s financial reports.
VTB's capital adequacy ratios at the beginning of September 2024 are the lowest among all banks except those under bailout procedure. The ratio has been declining for six consecutive months, down by 1.3 percentage points, and came close to the threshold (5.125%) which is followed by a write-off of subordinated loans.
Kommersant reminds that VTB representatives previously told the press that the capital adequacy ratio is declining due to the bank's integration with Financial Corporation Otkritie, which involves the transfer of clients and the loan portfolio.
However, VTB has another major merger ahead of it, with the planned consolidation of the Postal Bank.
The analysts surveyed by Kommersant do not rule out that the bank may need additional capitalisation, or will have to restructure assets to improve the risk coefficients. Dividends from subsidiaries might also help VTB improve its capital.
Previously in 2022 The bank had a RUB300bn capital injections approved with the state’s stake in the VTB’s capital decreasing from 76.4% to 61.8% as a result of two additional share issues. In addition, VTB as a state-bank is involved in recapitalising troubled state infrastructure assets, such as the United Shipbuilding Corporation (USC or OSK).
Related Articles
Belgium threatens to block Ukraine reparations loan unless EU shares risks
Belgium has warned it will block a proposed reparations loan to Ukraine backed by frozen Russian assets unless other EU countries agree to share legal and financial risks, Belgian Prime Minister Bart ... more
Russia ready to cooperate with Iran on nuclear issues, says Peskov
Russia will continue to cooperate with Iran including in the field of “peaceful nuclear energy”, Kremlin spokesman Dmitry Peskov said on October 20, Vedomosti newspaper reported. ... ... more
South Africa probes locally made LightWare components found in Russian drones used in Ukraine
South African authorities have launched an investigation after electronic components manufactured domestically were discovered in Russian drones used in the war in Ukraine, officials confirmed this ... more