A subsidiary of VTB, Russia’s 2nd-largest lender, has been suspended from trading on the London Stock Exchange (LSE) sine die following the adoption of sanctions by the UK in response to Russia’s President Vladimir Putin’s invasion of Ukraine.
On Friday, the LSE Group said that it had suspended VTB Capital’s membership with immediate effect, and it can no longer trade in the British capital.
The action comes after PM Johnson announced what he called the “largest-ever” range of sanctions against Russian firms and individuals, freezing the assets of all the main Russian banks, including VTB.
VTB, which is state-owned and has interests in banking assets throughout Eastern Europe, has £154 billion in assets. Next week, legislation is expected to be tabled to prevent major Russian companies from raising finance on UK markets and prevent Moscow from raising sovereign debt in London.
Meanwhile, VTB also said in a statement, “Sanctions are a reality for us in recent years, and another round of politically motivated anti-Russian sanctions did not come as a surprise.”
Moreover, the investment director at AJ Bell, Russ Mould, explained the importance of the stock exchange’s move. “To trade on LSE, you have to be a member on it, so if VTB Capital’s membership has been suspended, it will not be able to trade in secondary markets in stocks, bonds, derivatives, ETFs and any other instruments offered on the London Stock Exchange platform, or, presumably, raise funds for other companies (or the Russian state) via its primary/advisory arms.
It is listed on the MOEX stock exchange in Russia. It has a secondary listing in London, where investors can trade in Global Depositary Receipts (GDRs), equivalent to 2,000 ordinary VTB shares and are unaffected by the suspension order on subsidiary VTB Capital.
There are several VTB administrators and those with connections to the bank who feature in the government’s list of individuals against whom it has levelled sanctions.
Andrey Kostin, the president-chair of VTB and a member of the United Russia political party’s supreme council, as well as high-ranking executives Andrey Puchkov and Yuri Alekseyevich Soloviev, are among them.