Friday, 22 November

US Sanctions on Russian Banks Won't Affect Armenian Subsidiary, Claims VTB Armenia


VTB Bank (Armenia) CJSC claims that the sanctions recently applied by the United States on three Russian state-owned banks won't affect clients in Armenia.

The sanctions applied by the US on July 29 on the Russian Agricultural Bank (Rosselkhozbank), the Bank of Moscow, and VTB prohibit US citizens or companies from acquiring joint stocks, dealing with debt carrying maturities longer than 90 days or with new equity at these three banks. In other words, American companies and citizens are prohibited from providing loans to these banks. 

Recall, VTB Bank JSC's largest stakeholder is the Russian government (with a 61% share); in second place is Norges Bank (the Central Bank of Norway, with 4.3%), while third place is the State Oil Fund of Azerbaijan (with a share of around 2.9%).

VTB Bank JSC owns 100% of VTB Bank (Armenia) CJSC. The sanctions don't apply to other transactions or structures where VTB Bank JSC has a share. On this occasion, VTB Bank (Armenia) issued a statement [AM] on its website that it is operating as usual, providing a full range of loan and deposit transactions, including money transfers and the use of bank cards. 

"We emphasize that the applied sanctions in no way affect VTB-Armenia Bank clients: the bank will continue to provide a full range of services and fulfill its obligations in full and in all the currencies with which it worked till now. Visa and MasterCard representatives have already confirmed that the bank's plastic cards likewise can be used without restrictions not only in the territory of Armenia, but also abroad," reports VTB Bank (Armenia). 

The Financial Times reports that the US-applied sanctions will have an impact especially on VTB Bank JSC, as it strengthened its positions after the 2008 economic crisis. The State Oil Fund of Azerbaijan will suffer more because apart from the fact that it acquired a nearly 3% share in the bank last year, it invested $500 million.
(Correction - the last paragraph was modified after publication)

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Comments (2)
1. Armen_yan03:38 - 1 August, 2014
I don't get it. Which one is it, State Oil Fund of Azerbaijan acquired 3% share in the bank or it controls 60% of the bank's shares? Is it 3% or is it 60%?
2. Hetq11:35 - 1 August, 2014
Thanks for pointing out the contradiction. It's been corrected.
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