From August 1, 2014 the European Union introduced sanctions against Russia. The sanctions have been also applied to VTB Bank, in which the Russian government holds 61% shares.
In May 2013 the State Oil Fund of Azerbaijan (SOFAZ) invested $500 million into VTB and became owner of 2.95% shares of VTB Bank.
Will the sanctions affect VTB capitalization and capital invested by the Oil Fund?
“If this morning the Oil Fund would have sold all its shares in VTB Bank, it would have lost about $86 million,” financial analyst Samir Aliyev told Turan’s correspondent.
He said VTB Bank shares have decreased in value since the Oil Fund bought 4.9%, which means that SOFAZ’s losses totaled $24.5 million. The expert also said that during this period the Russian ruble inflation constituted 14%. “The Oil Fund’s capital in rubles was deprecated by $61.6 million and as a result total losses reached $86.1 million,” Aliyev specified.
How could the events develop? Will it will lead to the fact that the Oil Fund sends Russian assets to its own detriment or will it wait till the situation at the market improves?
The expert said that everything will depend on the relationships between the West and Russia and the Russian economy. “If the situation gets worse, then the Oil Fund’s losses will keep growing, but if the sides find agreement, it will get better,” Aliyev added.
SOFAZ believes “that the Oil Fund’s investment strategy is based on the long-term investments and we expect significant influence of the sanctions on our investments.”
