UPDATE 1-Russia's Trust Bank raises $680 mln from VTB share sale

(Adds details, background)

MOSCOW, May 19 (Reuters) - Trust Bank, a “bad bank” holding assets from three failed lenders, has raised around $680 million from the sale of shares in state lender VTB, adding to funds the authorities are trying to recover after costly bailouts four years ago.

Trust Bank holds bad loans from the three large private banking groups taken on by Russia’s central bank in a 2017 bailout. The 9.1% VTB stake, transferred to Trust Bank last year, was sold via an accelerated book build on Tuesday.

Under the deal, Trust Bank is selling close to 1.18 trillion shares at 0.0427 roubles per ordinary share, giving it proceeds of about 50 billion roubles ($678.69 million), VTB Capital, one of the deal’s organisers, said.

Boris Kvasov, co-head at VTB Capital’s equity markets division, said in a statement that order books were covered in less than a hour when they opened late on Tuesday, with more than half the demand coming from abroad and dominated by UK investment funds.

The central bank spent nearly 3 trillion roubles to bailout Otkritie, B&N bank and Promsvyazbank four years ago and is trying to recover at least some funds by selling assets.

Otkritie has been revamped into a “good assets bank” and plans to sell its own 5.7% stake in VTB, Otkritie Chief Executive Mikhail Zadornov told Reuters last month.

The central bank plans to sell off Otkritie, in parts or in full, either via an initial public offering or to a strategic investor starting from 2022, while Trust Bank will be wound up once its balance sheet is fully cleaned up. ($1 = 73.6710 roubles) (Reporting by Maria Kiselyova. Writing by Alexander Marrow and Katya Golubkova. Editing by Jane Merriman)