Azerbaijan's state oil fund SOFAZ has agreed to invest around $500 million in a new share offering by VTB, Russia's second-largest bank, the fund said in e-mailed comments.
VTB says it has already received firm orders for all of the 2.5 trillion shares it is selling in Moscow at 4.1 kopecks apiece, raising 102.5 billion rubles ($3.3 billion) to bolster its capital.
Jamala Aliyeva, head of public relations at SOFAZ, said the fund had been investing in Russian money market instruments, fixed-income securities and commercial real estate since 2012. The VTB investment marked a further step to strengthen its presence in Russia.
In the e-mail, she said SOFAZ would hold around 3 percent of VTB's share capital following the capital increase. It held no VTB stock previously.
The Russian bank declined immediate comment.