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1 February 2018
Russia’s Neophyte Retail Traders Spur $18 Billion Revamp at VTB

Russia’s biggest surge in mom-and-pop traders since 2009 is helping along a shakeup at the nation’s second-largest lender.

To meet the increasing retail-investor demand in stock and debt markets, VTB Bank PJSC is merging the brokerage business of its retail lender VTB24, with the investment consulting, brokerage and asset-management teams at its VTB Capital investment bank. The expanded investment-services unit will manage about 1 trillion rubles ($18 billion).
As central-bank rate cuts dim the appeal of bank deposits and burnish the allure of bonds, the number of Russian retail traders in the stock and debt markets jumped 19 percent last year to 1.3 million. VTB Capital’s Vladimir Potapov, who has headed the new division since it was created at the start of the year, says traders will focus more on equities in 2018 and predicts the investment-services market as a whole will grow about 35 percent annually.

“Low rates encourage investors to look for an alternative to bank deposits,” said Potapov, who has headed VTB Capital’s asset management unit since 2013, in an interview in Moscow. “We are waiting for inflows.”
Elena Burova was appointed the chief operating officer of the new business -- VTB Capital Investments -- and Ivan Chebeskov was named managing director of its brokerage division. VTB Capital also plans to strengthen its digital team, Potapov said.

The revamp came about as VTB Bank absorbed its VTB24 retail unit at the start of the year. VTB24’s brokerage contributed 250 billion rubles of assets, while the biggest share came from VTB Capital’s asset-management division, which overtook Sberbank PJSC last year to become Russia’s largest money manager, with 594 billion rubles in client assets.

VTB Group was sanctioned by the U.S. and European Union in 2014 over Russia’s involvement in the Ukraine crisis. The financial group’s chief Andrey Kostin was included in the U.S. Treasury’s list of senior Russian political figures published on Monday. The Treasury said inclusion in the rosters doesn’t mean the individuals will face sanctions or impose any restrictions on dealing with them.

VTB Bank has climbed 4.2 percent this year, lagging the 9.1 percent rally for the benchmark MOEX Russia Index.

Corporate Communications VTB Capital