The privatisation of a part of the state-owned stake in Russia’s second-largest lender VTB Bank may not be possible until 2017, VTB Chief Executive Officer Andrei Kostin said yesterday.
Russian news agencies quoted Kostin earlier saying that the privatisation might be completed in the autumn of this year, yet he acknowledged that the sale would be no easy task.  
Russia, in its second year of recession, plans to sell off stakes in some of its largest assets as it tries to stop its budget deficit from growing above 3% of gross domestic product in 2016.
“I don’t see a window (for a sale) at the moment, I only see a closed door. But we are working to open it a bit,” Kostin told reporters. “I think autumn is the earliest but I admit that we can move into 2017.”
The government stake in VTB may be reduced to 50% plus one ordinary share, the Kremlin said earlier this month, meaning that a stake of up to 10.9% could be for sale as part of a broader privatisation drive scheduled for this year.
Kostin added that the sale may happen on the Moscow Exchange. Economy Minister Alexei Ulyukayev was quoted as saying yesterday that the state may get over 84bn roubles ($1.3bn) from stake sales in diamond miner Alrosa and shipping firm Sovkomflot.
The sale is not an easy task because access to foreign financial markets was curbed significantly after the US and the European Union imposed sanctions on Russia in 2014 for its role in Ukraine. Kostin said on Tuesday that it was more likely that VTB would quit the Ukrainian market than continue to develop its business there.
Interfax news agency quoted Kostin as saying yesterday that there are three or four potential bidders for the Ukrainian business of his bank.
Kostin said that the bank does not rule out buying out its perpetual bonds to manage both rouble and foreign exchange liquidity.
“They are becoming quite expensive,” Kostin said, cited by Interfax.
VTB issued Russia’s first perpetual bond, worth $1bn, in 2012, to boost its core capital. Those bonds are permanent interest-only loans that issuers do not have to repay, allowing them to count the money raised towards capital.
They also pay more than bonds with a set security as investors must be compensated for the risks of buying papers with no redemption date.
Kostin added later to reporters yesterday that VTB does not have immediate plans to buy out its preferred shares from the state - a form of support the bank received to offset the effect of sanctions.