March 20, 2013 / 7:37 AM / 5 years ago

Russia's VTB says will re-examine business in Cyprus if levy enforced

MOSCOW, March 20 (Reuters) - VTB, Russia’s No. 2 bank, said if a bank deposit levy is enforced in Cyprus it would re-examine its business in the country, adding that any loss from its operations there in a worst-case scenario could be “tens of millions of euros”.

A levy on bank deposits had been proposed as a condition for a European bailout, although this was overwhelmingly rejected by Cyprus’s parliament on Tuesday. Russia has a high level of deposits in Cyprus’ banks.

VTB’s Cyprus subsidiary Russian Commercial Bank is stable and its standalone financial results account for around 3 percent of the group’s consolidated net profit, VTB said. VTB companies’ deposits and current accounts at RCB and other Cypriot banks amount to around 50 million euros, it said.

“We are of course concerned about the situation in Cyprus,” VTB said in a statement. “If this proposal is accepted, VTB would be forced to re-examine its business development strategy in Cyprus.”

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