Russian Bank VTB Sells U.S. Unit as Political Tensions Force Retreat

(Bloomberg) -- VTB Group, a state-owned Russian bank sanctioned by Washington, agreed to a management buyout of its U.S. unit, citing the “current geopolitical landscape” as a reason for its retreat.

VTB Capital Inc. was renamed Xtellus Capital Partners and will continue to offer VTB clients the same services as an independent broker, the Russian bank’s press service said in a statement. The prices of the deal was not disclosed.

The move comes amid other curbs to VTB’s international aspirations, with plans to cut its London headcount by a third announced by Chief Executive Andrey Kostin earlier this year. VTB was sanctioned by the U.S. in 2014 in response to Russia’s role in the Ukraine crisis, while Kostin was hit with personal sanctions this year as relations continue to deteriorate.

The lender, Russia’s second-largest after Sberbank PJSC, was also named in a bipartisan bill under consideration by the U.S. Senate which could bar it from dollar transactions. That helped send its share price to the lowest in nearly four years.

To contact the reporter on this story: Jake Rudnitsky in Moscow at jrudnitsky@bloomberg.net

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Keith Campbell, Geoffrey Smith

©2018 Bloomberg L.P.