MOSCOW (Reuters) - VTB (>> Bank VTB PAO), Russia's second biggest lender, sees no risks for itself from the central bank's bailout of Otkritie bank, it said on Thursday.

State-controlled VTB, which holds just under a 10 percent stake in Otkritie group, the holding company that controls Otkritie bank, supported the group via loans and other instruments during its rapid growth.

Asked about its role in Otkritie's expansion, VTB said it worked with financial institutions "purely on a market basis."

"Our cooperation with Otkritie is built on the same principles of openness and competitiveness as with other partners," it said in emailed replies to Reuters questions.

The central bank said this week Otkritie group, whose other shareholders include holding company executives as well as Lukoil's top managers and some others, grew too rapidly, with its capital failing to keep up with the expansion.

VTB said its share in Otkritie bank's liabilities was around 3 percent at its peak in the fourth quarter of 2015 and had fallen to insignificant levels since then. Those liabilities, it said, include trading operations with debt instruments.

"Other Russian financial institutions have worked with Otkritie in a much bigger scale," VTB said, without naming those institutions.

The bank, which spent a couple of years absorbing Bank of Moscow, Russia's biggest banking bail out to date, said Otkritie's financial rescue did not pose any risks to VTB as it did not have credit risk secured by Otkritie bank shares.

Under the bailout plan, the central bank will take a minimum of a 75 percent stake in Otkritie bank, Russia's biggest private bank and seventh largest by assets. The stake may increase to 100 percent if the bank's capital turns negative.

VTB said it helped to finance Otkritie group's purchase of a diamond business from Lukoil (>> NK Lukoil PAO) for $1.45 billion, a deal that completed in May.

That loan, VTB said, was provided at market rates and was not secured by Otkritie bank or group's shares, but rather by other assets.

"We do not plan to pull out of Otkritie's equity or to increase our current share. Neither do we plan to invest our own funds into the bank," VTB said.

(Editing by Mark Potter)

By Katya Golubkova

Stocks treated in this article : NK Lukoil PAO, Bank VTB PAO, Bank FK Otkrytiye PAO