Russia’s second-largest bank, VTB, said it has received 100 billion rubles ($1.8 billion) from the country’s national welfare fund as part of a plan to recapitalize the banking system hit by the falling ruble and Western sanctions.
This is the first tranche of a 250 billion ruble deposit planned by the government for the state-owned bank, which is the target of sanctions imposed by the US and EU over Moscow’s invasion of Ukraine.
The decree, published on the Russian government website, said the money was deposited for 30 years and the interest rate was set at inflation plus one percentage point.
The government says the public funds should be used to “finance profitable infrastructure projects”.
The national welfare fund is a huge pile of money accumulated during the years of high oil prices, when Russia earned billions of dollars through energy exports.
VTB said it had raised the deposit’s capital adequacy ratio to 12 percent. Another 150 billion rubles is expected in the first quarter of 2025, it said.
In October, the bank filed a lawsuit with the Court of Justice of the European Union, challenging sanctions that prevented European institutions from lending to the bank.
