Russian retail investors demand compensation from VTB for foreign losses

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  • This content was produced in Russia where the law limits coverage of Russian military operations in Ukraine

MOSCOW, July 22 (Reuters) – A few dozen Russian retail investors delivered a letter to the country’s second-biggest bank, VTB (VTBR.MM) on Friday, asking for compensation for losses suffered on their foreign investments after the imposition of Western sanctions earlier today. year.

In the letter, they said that VTB – among the first Russian entities sanctioned after Moscow sent troops to Ukraine on February 24 – closed operations too quickly for retail investors and thus deprived them of a chance to sell. their assets now frozen.

They said VTB blocked retail clients from selling foreign stocks on March 3, 13 days before Euroclear, one of the two major Western clearing houses, suspended operations with its Russian counterpart, the National Settlement. Depository, March 16.

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The letter, seen by Reuters, demanded VTB reimburse retail investors on SPB Exchange, Russia’s main foreign equity trading platform, for the value of their holdings as of March 3 and said they would sue. in court if the public bank declines. . He did not specify how much money the retail investors were asking for.

VTB declined to comment when contacted by Reuters.

Reuters could not independently confirm that VTB halted stock trading for retail clients on March 3. The National Settlement Depository posted a notice on its website on March 17 that Euroclear had suspended trading with it.

The United States imposed full blocking sanctions on VTB, which accounts for a fifth of Russian banking assets, on the day Moscow launched what it calls a special military operation in Ukraine, severing the bank’s ties with its counterparts Westerners.

According to VTB, it held about 2.6 trillion rubles ($47 billion) in retail investor assets last year.

Russia’s central bank says the sanctions have prevented some 5 million Russians from accessing shares they own in foreign companies, worth a total of more than 320 billion rubles.

Igor Deryabin, a 25-year-old Muscovite, and his wife Darya, were among the protesters Friday at VTB headquarters in Moscow’s financial district.

“We were buying the safest stocks hoping for higher prices and dividends,” Igor told Reuters. “We wanted to build up more capital for bigger purchases, to buy an apartment.”

He said his family had lost access to shares worth more than a million rubles in two dozen foreign companies, including IBM and Shell. The average monthly salary in Russia is 67,000 rubles.

The couple were among more than 450,000 people who VTB said used its app to manage their stock holdings.

Interest in stock market investments skyrocketed in Russia during the coronavirus shutdowns two years ago. Last year, 17 million Russians – about one in five people – held nearly 8 trillion rubles in brokerage accounts, according to the central bank.

Moscow retaliated against Western sanctions by blocking foreign investors’ access to Russian securities, including stocks and roubles, ending years in which money had flowed into the Russian stock market and economy.

($1 = 55.3750 rubles)

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