Russia boosts state bank with 5.7 bln dlrs
MOSCOW: Russian authorities will inject 180 billion rubles (5.7 billion dollars, 4.1 billion euros) into state bank VTB, Prime Minister Vladimir Putin said Monday as Russia fights off a banking crisis.
"I have signed a resolution increasing the capital of VTB bank by 180 billion rubles," Putin said at a cabinet meeting. The decision is almost certain to be approved at an upcoming meeting of VTB shareholders.
The Russian banking sector, shaken by the global financial downturn, is particularly vulnerable to risky credit.
The ratings agency Moody's has warned risky credit could account for 20 percent of the sector's overall portfolio by the end of this year.
Finance Minister Alexei Kudrin has acknowledged the level of non-reimbursable credit will likely increase but earlier stressed that the state was prepared to support the banks to avoid a crisis.
Putin said the government would also increase the capital of state railway company RZD by 11.3 billion rubles (359 million dollars, 257 million euros).
RZD said last month it would be forced to cut tens of thousands of jobs because of lower cargo rail transport as a result of the economic crisis.