2010 profit reserves ‘Bank of Moscow’

ST PETERSBURG: Bank of Moscow, recently taken over by the state-controlled VTB bank, has allocated almost all of its 2010 net profit to shoring up reserves, the bank's head told Reuters on Friday.

Mikhail Kuzovlev, the bank's president, said that the bank's net profit came out around 12 billion roubles ($425.8 million) last year.

"After reporting results, we increased reserves by 10 billion (roubles)," Kuzovlev said on the sidelines of Russia's showcase conference, the St Petersburg International Economic Forum.

In April, the bank, one of Russia's largest financial institutions, denied reports that the central bank had asked it to hold up to $7 billion more in reserves against possible loan impairments

Kuzovlev would not provide the amount of bad loans accumulated under the watch of the bank's former owners and would not comment on whether the bank has asked for government aid, as the business daily Vedomosti reported on Friday.

According to the newspaper, the bank, which had 116 billion roubles ($4.2 billion) of equity capital at the end of 2010, asked the government for 150 billion roubles for reorganisation of the assets and that it may need another 100 billion later.

Andrei Kostin, the head of VTB, also refused to comment on the bank's financial situation on Friday.

The Bank of Moscow's former chief executive Andrei Borodin had resisted attempts by VTB to acquire control of the bank, a cornerstone of Moscow's finances under former Mayor Yuri Luzhkov until he was ousted last year.

Earlier this year, Borodin and his deputy Dmitry Akulinin fled Russia for Britain after a row with VTB.

Copyright Reuters, 2011