— The main theme of this year — privatisation VTB. How much and when?
Neither on the first nor on the second question it is impossible to give an exact answer. The privatization of VTB Bank extremely difficult in today’s environment. Mainly because of the sanctions imposed including on the Bank. Even if the placement of Russian Eurobonds, where it was not about the sanctions action was still a huge pressure. You know that Euroclear (an international clearing system (is ) refused to participate. We are now working with the market and see that the same concerns will arise for investors and privatization. In addition, constantly there are new comments from the US state Department that investors may suffer not only loss of reputation but also financially. The investor is intimidated. Although Russian assets attract foreign investors, in my opinion, it will be quite a difficult deal. Although we are not the sellers and underwriters, I see the sale of shares of VTB in the future not only of this, but perhaps next year.
In addition, in my opinion, we should not exaggerate the importance of privatization of shares of VTB. Selling 10% shares in fact does not change anything in the Bank, because VTB has already corporatised, and its shares are traded on the London and Moscow stock exchanges. 40% stake in the Bank is already from investors, many of whom are foreign. There are large investors, as for example, state oil Fund of Azerbaijan or Qatar. So we look at the privatization of the package of VTB is more like some kind of fiscal deal: the state requires additional resources and therefore it sells. But on governance, transparency or the activity of the Bank is by and large not affected.
— Do I understand correctly that the lifting of sanctions will give a chance to carry out privatization?
— I’m not saying you can’t sell without it, but, of course, the lifting of sanctions, this problem would be solved easily. VTB group since 2007 when I started the privatization — brand market deals attracted $14 billion. We know how to do it. But, unfortunately, other terms and circumstances that really create a very serious problem.
— You also are a host of other transaction — the sale of a stake in Bashneft. In this transaction you feel pressure on investors? Investors have already put forward special conditions?
— Decree on the appointment of the us agents was signed recently. We actually couldn’t get to work, so only now are we beginning to study the company. I think that there is any problems will not be. Much interest, including from Russian market participants and strategic investors who are already in this business. And this deal, in my opinion, can truly be called privatization. Being now a fully public company becomes private (in contrast to VTB transactions where the nature of the property does not change from the sale of the minority package). Therefore, I believe, to the privatization of Bashneft interest will be. A lot of technical work: we need to see what is going on, what happened to her, what her real outcomes. But I think such a deal can be completed before the end of the year.
Andrei Kostin: VTB stake may be privatized in 2016-2017 Video: Channel
— Do you think the surprises will be? Now talking about LUKOIL as a potential buyer. Do you think that there may be more investors?
— I think that the list of participants can be much wider, because the company is promising. Not many oil companies in Russia are fully privatized. I think that even with the current level of oil prices, the transaction would raise a lot of interest.
— You said earlier that it’s only the beginning of privatization, but in the future it will become large. Why do you think so?
— I think if we start talking about serious structural changes and that should leave from a raw orientation of our economy, we certainly need to be privatised. In recent years, since the crisis of 2008-2009, Russia has greatly increased the role of the state. It has increased not because of ideological vector, but simply due to the fact that private companies were slable, and the state helped sometimes given capital, guarantees, etc. Now, I think it is time to reduce the role of the state. Of course, there are sectors — for example, defense industry, nuclear energy — which, in my opinion, should remain state property. But the nationalization of other industries — the same pharmaceuticals is wrong. If we want to really create a good market competition, we have privatised. And, apparently, the government in this direction are ready to move.
— You called the pharmacy. What other industry can be promising?
— I think it’s engineering, instrumentation, because we need to eliminate the gap (with other countries ). At the forum the President said that the sanctions to a certain extent, help us. But if you come today to any advanced enterprise which produces engineering products, you will see that almost all the equipment is imported. If we are talking about the need to create another of the Russian economy, based on advanced technologies, we have to learn these advanced technologies to develop and use. Including their use in such industries as engineering, machine tools and even in the oil industry, Now, unfortunately, all providing the same Boers — American.
How about Rosneft and the banking sector? Sberbank, for example, may be subjected to large-scale privatization?
— I believe that this brand is not afraid and that you can do it. There is even a more fundamental question — the question of monopoly. Monopoly, be it private or public, is bad and is bad for the economy and business. If public or private has a share in 50% of the market, then it’s bad, in my opinion. Need some way to diversify, as well as in all other industries. In my opinion, it is even more important than privatisation.
— You are a supporter of the crushing of the savings Bank?
— No, in any case. I never threatened to fragmentation of the savings Bank, this subject took place in the 90s. But I think that competition will develop. If the geopolitical situation improves, then maybe start to increase the pace of foreign banks. Today they have significantly reduced their activity in Russia, but, probably, the leaders of these banks would like to return. I think that someday it will happen. This high-tech foreign banks, they make Sberbank and VTB to run faster, and strive to improve their work.
The head of VTB Andrey Kostin
Photo: Ekaterina Kuzmina/
Sberbank contributes much into the development of IT-technologies. And what makes VTB in this field?
VTB holds about the same investment. We all understand that banking is increasingly moving into the sphere of high technologies and contactless transactions. But I do not agree with their colleagues. Mr. Khasis (Lev Khasis, first Deputy Chairman of Sberbank ) said recently that the Bank is not a Bank but a high-tech company. I don’t think so and I such a future for VTB do not see. I see the future as a high-tech VTB Bank.
— What’s the difference?
— I believe that banking is ahead, and the technology is just a means of solving those or other problems. People will still want to place money and receive settlement funds. But he’s come to RUB in the “window” and can use the Internet or mobile phone for this. Form changes, but essentially it’s still banking.
In the future banking will be more tech. Probably not in the next 2-3 years, but maybe 10 years from now these technologies will be implemented. And, by the way, we are focused on this. For example, our new project Email the Bank targets customers with low incomes, but this does not mean that it will be absolutely retarded. On the contrary, we plan on the basis of modern technology that existed in the Summer a Bank to create a Bank for young modern people.
— You brought up the topic of Eurobonds. The rumor was that foreign investors, and as such was not that the Bank purchased Eurobonds through their foreign daughters.
— No, it’s the perfect lie. Indeed, the volume of foreign applications decreased dramatically after Euroclear refused to participate. This is understandable: many investment funds are unable to invest differently. At the behest of the Ministry of Finance, we were forced to refuse the requests of our clients and major Russian banks. It was a very large application, that is, to sell $3-5 billion is quite possible. But the Finance Ministry wanted to attract funding from external investors, i.e. those that the Russian market would not otherwise get. But this does not mean that Russian companies could not go through their offshore.
It was an absolutely fair deal, and demand from foreign investors could be even greater if not for such a policy of direct pressure from the political structures. To get a coupon of 4.75% in dollars in the conditions when in the world are bonds with negative yields, this is a great investor happiness.
— About foreign assets. Are you going to sell the Serbian business?
— It’s so small. There, in my opinion, capital is less than EUR 10 million, so it’s just such a clearing. We wanted to sell, but was a request of the leadership of Serbia. In fact, it is difficult to find business for the Bank, we will, most likely, it will sell. I believe that if the business does not work, does not give the desired yield, then it should be closed. But it is absolutely not the material for business VTB.
— The Ukrainian assets will sell?
With a Ukrainian Bank the situation is as follows. There are two reasons why we still have a cautious stance. First — because it’s not easy to find a good buyer, in the terms that we would suit. Secondly, because the situation in the Ukrainian economy began to improve, the demand for loans increased a little. We see that both the company and the population began to work better with banks. Therefore, we believe that large additional losses we must now take. Our position today is that we continue to work as usual. We would like to say that while not going anywhere. If there is a reliable and interesting new shareholder, we will consider it. Today, no deal no. We, of course, the Bank will not abandon and we will not have defrauded investors or defrauded customers, that’s for sure.
— How is your Bank in Cyprus? Especially after all the scandals that happened, did you have any problems with the business?
— We do not own today a controlling stake in the Cypriot Bank, our share is about 45%. The scandal completely contrived. Central Bank of Cyprus and European Central Bank carried out the necessary checks, they requested materials, no claims could not be. Here we say “Panamanian securities”, in fact none of these papers are not seen as such, but the interpretation that was given in the press are completely untrue. And probably can’t be reality, because the people who comment on them, do not see Bank documents. Another thing is that the Bank will never be at this level to argue with the press. Because in order to prove his innocence, you need to show Bank documents. And, of course, we will not do this because there are the interests of the client. There were mixed and banks, and people, and companies, names, and so on. Any of unsecured loans the Bank gave. All loans that were given back. None of the loan we were not given any man by the name of Roldugin, nor his company. Therefore, we believe that this topic is closed for us.
Will there be any attempts to damage our banks abroad? Can be and will be. I do not exclude, because we see quite rigid approaches to our financial institutions. In General, the whole situation, penalties, etc. have some purpose. But the Bank operates, observing all the brand rules that exist within the EU, not just Cyprus. And we today do not see.