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. Last Updated: 07/27/2016

VTB Says It Can Repay $1Bln Debt

VTB, the country's second-largest bank, has enough cash to redeem bonds worth $1 billion that mature in September without requiring the Central Bank's help, a top manager said Monday.

The floating rate notes, which fall due for repayment Friday, were bid at par Monday. VTB, which has the heaviest debt repayment burden of any domestic bank through to the end of the year, will not refinance the debt.

"We will pay with our own money, we have already set this amount aside. The bank has enough liquidity and we do not need any special measures," VTB deputy chief executive Vasily Titov said.

Russian banks actively borrowed abroad in recent years to finance their rapid growth.

State-controlled VTB, rated BBB+ by Standard & Poor's, is one of the largest borrowers, with debts of almost $15 billion. It still has to repay $1.4 billion in total this year, $3.6 billion in 2008 and $4.6 billion in 2009.

Analysts have said debt repayments by Russian banks in September will contribute to a liquidity shortage, expected to reach its peak in October and November.

The Central Bank estimated the demand for liquidity to reach about 270 billion rubles ($10.7 billion) daily by the end of the month. Konstantin Korishchenko, Central Bank deputy chairman, told a news conference that the bank could guarantee that the demand would be met.

"We are approaching the end of the month, tax payment time. It will result in higher demand for liquidity, which the Central Bank will meet using existing mechanisms," Korishchenko said.