VTB Group on Thursday announced their expansion into yet another financial field, saying it will begin buying up struggling firms' accounts receivable as payment arrears across the country skyrocket.

"Our factoring unit will open up new financing opportunities for those companies that currently don't have access to credit," said Michael Yakunin, vice president and head of VTB's financial subsidiaries division.

Factoring, or selling accounts receivable to third parties, has become an increasingly popular practice in Russia in recent years. In 2008, total invoices transferred to the factoring market totaled $22.1 billion, more than twice as large than in 2006.

VTB, Russia's second-largest lender, is entering the market as Russian producers are confronting a rising number of delayed payments from clients, liquidity concerns and limited access to capital markets.

"The management decided to develop the factoring business ... to support the Russian government's plan to pacify the current financial crisis," said Yakunin, who added that the unit aimed to become one of the top-three factoring companies in the country by the end of the year.

VTB's largest would-be competitor, Eurokommerz, is currently facing bankruptcy with 28 billion rubles ($840 million) in debt and a portfolio that is 84 percent delinquent, managing director Ilya Volkov said in a recent interview with Vedomosti.

In March, the company entered technical default on a 5 billion ruble bond issue, citing a "liquidity shortage" and "a difficult situation on the financial markets." In the fourth quarter of 2008, the company was unable to meet a series of payments to creditors or pay coupons on other bond issues.

"The situation hasn't ameliorated, and bankruptcy is still highly possible if an agreement with creditors can't be reached," said Dmitry Belkin, the company's investor-relations manager.

Market participants, however, do not expect Eurokommerz's woes to rub off on a state-owned financial giant.

"I believe VTB could do very well, because the financial crisis is a good environment for some financial services products, and factoring is one of them," said Alexander Tyutyunnik, a partner at KPMG in Russia.

"In this environment, companies are struggling because retailers are delaying their payments by as much as four months. You need cash to operate, and factoring is the instrument that can provide you with the cash," Tyutyunnik said.

Even VTB's competitors do not see much going wrong for the bank.

"VTB has a strong balance sheet compared with other factoring companies," said a representative of a top factoring company who refused to be named because of his company's delicate position during the crisis. "It's a state-owned bank. ... You don't pay them, you're not paying the state."