Russia's second-largest bank VTB said Monday it would acquire full ownership of its debt-ridden rival Bank of Moscow for $9.15 billion in a deal establishing its dominance in the Moscow retail market.
The state bank's announcement came after it reported a 70-percent jump in first quarter income to 26 billion rubles ($920 million) and improved its outlook for 2011 to a net profit of 100 billion rubles ($3.55 billion).
"We are raising our forecast. By the end of the year, the group will make 100 billion rubles," RIA Novosti quoted VTB chief financial officer Herbert Moos as saying. Both figures were helped by a massive state bailout package this month that underscored the bank's importance to the country's financial system at a time of global jitters and European debt concerns.
VTB's robust forecast came just 10 days after Moody's ratings agency downgraded its outlook to "negative" following its partial acquisition of the Bank of Moscow in a deal that revealed unexpected flaws.
A post-acquisition audit of the Bank of Moscow - itself a member of Russia's top five - showed the group holding $9 billion in bad debts from real estate deals which were backed by now-deposed city mayor Yury Luzhkov.
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