Issue of preference shares

Press release

30 September 2014

VTB completes placement of preference shares

VTB completed a placement of preference shares for total amount of approximately RUB 214 billion. The Russian Federation Ministry of Finance acquired the shares at par value of one kopeck. The share issue was included in VTB Bank's core Tier 1 capital under Basel III.

The share issue was completed in accordance with Federal Law 275-FZ, passed in July 2014, which allows for subordinated debt received by banks as part of measures to support Russia's financial system in 2008 to be converted into Tier 1 capital. One form of capital has thus been replaced by another, with no new capital being raised.

VTB President and Chairman of the Management Board Andrey Kostin said: "Without a doubt this placement will have a positive effect not only on VTB's capital levels, but also for the Russian economy as a whole enabling the Group to lend more actively to the country's strategic industries and SMEs, and to support infrastructure projects. I believe that this capital increase, combined with the professionalism of the VTB team, will help drive the Group's development going forward."

The Russian legislation does not specify dividends paid on the new securities. Dividends will be subject to annual approval at the Annual General Meeting of shareholders (AGM). In addition, the new preference shares will not be counted when determining the presence of a quorum at the AGM, and will not change that total number of votes belonging to holders of VTB's ordinary shares.