London Stock Exchange suspends Russia’s VTB Capital sine die

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A subsidiary of VTB, Russia’s second-largest lender, has been barred from trading on the London Stock Exchange (LSE) sine die following the adoption of sanctions by the United Kingdom in response to Vladimir Putin’s invasion of Ukraine.

On Friday, the London Stock Exchange Group said that it had suspended VTB Capital’s membership with immediate effect, and it can no longer trade in the British capital.

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The action comes after PM Boris Johnson announced what he called the “largest-ever” range of sanctions against Russian corporates and individuals, freezing the assets of all the main Russian banks, including VTB.

VTB, which is primarily state-owned and has interests in banking assets throughout Eastern Europe, has £154 billion in assets. Legislation is expected to be tabled next week to prevent major Russian companies from raising finance on UK markets and prevent Moscow from raising sovereign debt in London.

VTB 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, Russ Mould, investment director at AJ Bell, explained the importance of the stock exchange’s move. “You have to be a member of the LSE to trade 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 LSE platform, or, presumably, raise capital for other companies (or the Russian state) via its primary/advisory arms.

VTB 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), which are equivalent to 2,000 ordinary VTB shares and are unaffected by the suspension order on subsidiary VTB Capital.

There are a number of VTB administrators and those with connections to the bank who feature in the government’s list of individuals against whom it has levelled sanctions.

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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.

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