President Vladimir Putin has approved a two-stage plan to split ownership of Vneshtorgbank, the nation's second- largest bank, between the government, the Central Bank and the European Bank for Reconstruction and Development, Vneshtorgbank chairman Yury Ponomaryov said Friday.

The supervisory board of Vneshtorgbank, or VTB, on Friday morning approved a possible new share issue worth up to $300 million, set for this spring at the earliest, Ponomaryov said. The new shares would be offered to the EBRD or to two other international financial organizations that have expressed an interest, he said. He did not name the other contenders.

The EBRD has said that it would not comment on the size of the stake it plans to buy or the amount it is willing to pay until the plan was approved by Putin and negotiations had started.

"The EBRD is now looking forward to working with the Russian government, the Central Bank and the management of Vneshtorgbank in putting together this deal along the lines which have been discussed," read a statement from Kurt Geiger, director of the EBRD's financial institutions team.

In the first stage of restructuring, the government will be offered a 40 percent block of VTB's existing shares.

"It is not clear how the government will pay the Central Bank for the stake," Ponomaryov said. "The government needs to determine a means for financing, a formula for regulating property relations, that doesn't use budget money. But that is the subject of government and Central Bank negotiations, which have not started yet."

"The government, represented by the State Property Fund, just does not have enough money to buy Vneshtorgbank from the Central Bank," said Mikhail Matovnikov, deputy director general of Interfax Rating Agency. "In this case Central Bank interests are clear: It wants to sell the Vneshtorgbank stake to someone who is ready to pay for it."

The plan marks a compromise on the part of the government, which last week demanded the Central Bank fully divest itself of its 99.9 percent share in VTB before a sale to the EBRD could move ahead. The Central Bank will continue to hold a major stake in the bank for at least the near future, Ponomaryov said. The bank reform plan signed by Central Bank head Viktor Gerashchenko and Prime Minister Mikhail Kasyanov had set a target date of Jan. 1, 2003, for Central Bank divestiture.

"If a hurried decision would inflict material damages on any of the parties, I would rather wait and not create victims just to meet a certain date," Ponomaryov said.

The Central Bank law will have to be amended to allow the Central Bank to withdraw from VTB. A Central Bank spokeswoman said it is still too early to speak of any concrete changes to existing legislation.

Shareholders will decide on whether to fully or partially privatize VTB and how much of the bank to sell to foreign investors during the second stage of restructuring VTB's ownership, set indefinitely in the future.

VTB's share capital was 42.1 billion rubles ($1.4 billion) in 2001. The bank's net profits rose 80 percent to 2 billion rubles, and its assets rose 30 percent to 145 billion rubles. Loans to the real sector doubled to 63.5 billion rubles.