Russia’s No. 2 bank, VTB, says it is not interested in buying Cypriot lenders

VTB, Russia’s No.2 bank, is not interested in buying banking assets in Cyprus, its CEO Andrei Kostin said on Thursday, as talks continued on whether Russia can provide help to the island in return for equity in its banks.

Finance Minister Michael Sarris was in Moscow for a second day of to seek investments in Cyprus’ banks and energy resources to reduce its debt burden, as well as seeking an extension to an existing Russian bailout loan.

Asked if VTB was interested to buy banking assets in Cyprus, where it operates via its subsidiary Russian Commercial Bank, Kostin answered: «No».

“Two big banks there are in a very hard situation, they need significant investments in the form of a bailout. So it’s meaningless to speak in any way about us being interested,» he told reporters.

Officials have said Russian investors are interested in buying control in Cyprus Popular Bank and increasing their holdings in Bank of Cyprus – the two biggest banks on the Mediterranean island.

The Cypriot government denied on Wednesday that it had struck a deal to sell Cyprus Popular Bank to Russian investors.

VTB had $13.8 billion in assets and $374 million in equity through its Cypriot subsidiary, Russian Commercial Bank, at the end of 2011, according to Moody’s.

On Wednesday, VTB said that it would re-examine its business in Cyprus if a bank deposit levy is enforced, adding any loss from its operations there could in a worst-case scenario reach «tens of millions of euros».

Cypriot banks have been shut since last weekend, after the European Union proposed a tax on banking deposits as a requirement for 10 billion euros ($12.95 billion) bailout for Cyprus needed to support its banking system.

Kostin said that VTB may revise its strategy regarding Cyprus operations or even shut down its operation on the island if a levy, or similar charge, is imposed.


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