15 Feb 2011

Russian govt stake in bank sold

9:51 am on 15 February 2011

Russia has raised 96 billion roubles ($US3.3 billion) from the sale of a 10% stake in VTB, the country's second biggest bank.

The sale marks the start of a huge privatisation drive aimed at raising 1 trillion roubles over three years.

Prime Minister Vladimir Putin said that the sale was "proof of the trust in the Russian financial system".

Separately, the head of Russia's biggest bank, Sberbank, said that 7% in the bank could be sold later this year.

The BBC reports the government wants to use money from the sale of minority stakes in state-owned companies to help finance its budget deficit, as well as attract foreign investors.

VTB shares have fallen by 10% since the end of January when the government said it would sell the stake in the bank via the open market.

VTB head Andrei Kostin said that the share offer was twice oversubscribed.