Reuters: Financial Services and Real Estate: VTB cuts guidance, in talks on Ingosstrakh stake

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VTB cuts guidance, in talks on Ingosstrakh stake Mar 29th 2012, 06:02 MOSCOW, March 29 | Thu Mar 29, 2012 2:02am EDT MOSCOW, March 29 (Reuters) - The CEO of VTB, Andrei Kostin, has cut earnings guidance for 2011 but said Russia's No.2 bank would be able to strengthen its capital base by retaining earnings and would not have to conduct a rights issue. Kostin, in remarks to journalists released for publication on Thursday, also confirmed that state-controlled VTB is in talks to buy a stake in Russian insurance company Ingosstrakh from Czech investor PPF. He said that VTB would seek to boost its capital adequacy, to International Financial Reporting Standards, to 10 percent this year from 9.5 percent last year, a level that had raised market concerns about the strength of its capital base. Kostin said that VTB would not resort to a rights issue but instead capitalise earnings to boost its capital adequacy. He said 2011 earnings, due to be reported next month, would come in above 90 billion roubles ($3.06 billion) but below earlier guidance of 100 billion roubles. Commenting on Ingosstrakh, Kostin partially confirmed a report this week in the Vedomosti daily that VTB was holding negotiations to buy a near 40 percent stake in Ingosstrakh from Czech group PPF and Italy's Generali. "We confirm the fact of talks by VTB about buying PPF's stake in Ingosstrakh," Kostin said. Ingosstrakh has branches throughout Russia and offices in Azerbaijan, Kazakhstan, Ukraine, India and China. VTB, Russia's No.2 bank, has been aggressively expanding in Russia, both in building out its investment banking business and through acquisitions. It battled for around a year for control of Bank of Moscow, which was Russia's fifth-largest bank. The bank, which floated in 2007, has however seen its shares fall since its IPO, prompting a government order for it to compensate small investors for a decline in its share price. Link this Share this Digg this Email Reprints

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