Russian government triples bailout of Trust bank

The Russian government has been forced to triple its bailout of one of the country's ailing banks, as it battles the crisis caused by the devaluation of the ruble.

The $2.4bn bailout of Trust bank, which uses Hollywood actor Bruce Willis in its advertising campaigns, is believed to be the second biggest in Russian history.

The bank, Russia's 32nd biggest lender, has been badly hit by the ruble crisis, with many Russians rushing to invest in foreign currency and withdraw cash.

Economic sanctions imposed after the Ukraine crisis also restrict Russian banks access to international capital markets.

On Monday, Russia's central bank announced that it would lend Trust Bank $540m (30bn rubles).

Four days later it said the loan would be replaced with another for 99bn rubles over 10 years from the Deposit Insurance Agency, to cover the imbalance between its assets and liabilities.

Last week, Russia's lower house of parliament approved a bill providing the Russian financial sector with a one trillion ruble boost.

Banks are expected to begin receiving the funds early next year. The funds earmarked for Trust constitute 13% of that figure.

The central bank has also launched drive to clean up the country's banking sector and the licenses for 100 banks have been revoked over last year.

The bailout is the largest since the government loaned the Bank of Moscow 400 billion rubles in 2011.

The ruble rose on Friday to its strongest levels in more than three weeks after the government ordered exporters to sell some of their hard currency revenues.

However, the currency remains down 38% against the dollar this year.