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. Last Updated: 07/27/2016

VTB Denies Wanting Slice of Russky Standart Bank

State-controlled VTB on Tuesday denied a report that it had sought to buy a stake in the country's leading consumer lender, Russky Standart bank.

"We were never in any talks on taking a stake in Russky Standart bank," VTB deputy chairman Yulia Chupina said, denying a report in Vedomosti.

Citing unidentified sources, the newspaper said VTB had made an approach to Russky Standart, but its offer to buy a 10 percent stake had been rebuffed by owner Rustam Tariko. "VTB needs a consumer credit business, and Russky Standart is the undisputed leader," one source told the newspaper.

Russky Standart declined comment, but Tariko has repeatedly said his bank is not for sale and analysts said an equity transaction appeared unlikely.

The report comes as Russky Standart faces close investor scrutiny over its heavy exposure to wholesale sources of funding that have been shut down by the fallout from the U.S. subprime mortgage crisis. Russky Standart, which controls 70 percent of the country's credit card market, repaid a $300 million eurobond last week, but has suspended issuance of new bonds and is seeking to build alternative funding sources such as deposits.

Vedomosti also cited VTB managers as saying VTB was interested in buying part of Russky Standart's credit portfolio, specifically a $10 million tranche of auto loans and possibly also credit card receivables.

Chupina said VTB was in talks to buy part of the credit portfolios of other banks, but that it was premature to give any specifics.

Analysts said such a transaction involving VTB and Russky Standart was far more likely than a stake sale. "While a deal for VTB to acquire parts of Russky Standart's loan portfolios is probable, the complete sale of Russky Standart is unlikely as the main shareholder is not willing to sell a successful business," Deutsche UFG said in a note.