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Report: VTB Bank transfers defense sector loans to Promsvyazbank

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Report: VTB Bank transfers defense sector loans to Promsvyazbank

VTB Bank PJSC transferred 32.9 billion Russian rubles worth of defense sector loans to PAO Promsvyazbank, which specializes in servicing the country's weapon makers, news agency Prime reported Sept. 27, citing RIA Novosti.

The handover of these loans to Promsvyazbank will be accompanied by a 3.78 billion rubles transfer of capital. This will be carried out via the payment of dividends on VTB Bank's preference shares, which are owned by the Russian Finance Ministry.

VTB Bank's supervisory board recommended a dividend of nearly 0.00018 ruble per 1 type 1 preference share from the lender's earnings retained from previous years, VTB said Sept. 27.

Bailed out by the Russian central bank in December 2017, Promsvyazbank was chosen by the Russian government to service the country's defense sector companies to shield other local lenders from potential Western sanctions.

As of Oct. 2, US$1 was equivalent to 65.24 Russian rubles.