Kostin commented on the sanctions against Ukraine “daughters” of Russian banks


The decision on introduction of sanctions “dochek” Russian banks adopted in Kiev for political reasons and is detrimental to the economy of the Ukraine, said the head of VTB Bank Andrey Kostin. He acknowledged that work in Ukraine to Russian banks is getting harder, it seems, local authorities are pushing them to care.

“This, apparently, want the Ukrainian government, but I think that it is their decision wrong,” said the head of VTB on the sidelines of the Congress of the Russian Union of Industrialists and entrepreneurs in the framework of the conference “Russian business Week” (quoted by TASS).

According to Kostin, the new sanctions could adversely affect the cost of Ukrainian “daughters” Russian banks and will have a negative impact “on the activities of all banks, referred to”.

“When you invest in the economy of the country and can’t even put a cent back to, it creates obstacles for the further activities of Russian financial institutions”, — said Kostin, noting that sanctions against Russian banks aimed at including the fact that some borrowers did not return them money.

“But we will seek to raise funds in order to enable the Bank to successfully continue to conduct operational activity”, — said Kostin, stressing that the Bank sees no necessity to limit the issuance of deposits of Ukrainian “daughters”.

“We always strictly complied with all obligations, regulations, responsibly pursued a policy towards our customers. We will support them further,” — said Kostin, noting at the same time that, in General, VTB Ukraine adheres to the “exit” and before the end of March plans to close the sale belonging to him the Ukrainian BM Bank.

On the sale of the Bank VTB Bank (Ukraine) to say, according to Kostin, it is too early, because the situation is “quite difficult”.

“We still want to see this output was not associated with additional large losses, so we continue our work”, — said Kostin.

March 13, 2017 Chairman of the Board VTB Bank (Ukraine) in an interview with the Ukrainian newspaper “Business” said that the process of finding new investors for the Bank may take two to three years.

“Now the shareholders of any Ukrainian Bank — both foreign and local — are considering the option of selling the business. The question is, how much they are willing to lose the sale. This is the root of the problem, because the market is dominated by buyers. Everybody understands that the market is limited, the situation is not the best. However, there are investors who are interested in entering the Ukrainian market or the increased presence,” said Weissman.

The day before, on March 15, the national security Council and defence of Ukraine (NSDC) has instructed the National Bank of Ukraine (NBU) during the day to prepare proposals on the introduction of sanctions against working in Ukraine banks, in whose capital there is the share of state banks in Russia.

Later the first Deputy head of the NBU Jacob Smoliy said that the proposed sanctions to be imposed on the Ukrainian subsidiaries of Sberbank, Vnesheconombank and VTB.

“With the aim of preserving financial stability in the country, run by Ukrainian banks with Russian state capital obligations to customers [Bank] proposes to apply sanctions in the form of a warning of withdrawal of capital outside Ukraine,” — said resin.

According to him, the ban will be imposed on any transactions in favor of the parent banks, including interbank loans, deposits, purchase of securities, prohibition of dividend payments and other operations.

In 2016, according to Ukrstata, direct investment of Russian business in 2016, the Ukrainian economy amounted to $1,667 billion, only slightly less than was invested in all EU countries. Compared to the previous year, investments from Russia have increased by about 2.5 fold (from $676,2 million), which is primarily due to the active infusion of Russian banks in the capital of its Ukrainian “daughters”.

In particular, the Russian Vnesheconombank in 2016, in two steps increased the authorized capital of the controlled Bank, for $865 million, and VTB Bank has increased the capitalisation of BM Bank more than $65 million In the same year, was increased the capital and other Ukrainian “daughter” VTB — VTB Bank, — it added almost $350 million, taking into account the three stages of capitalization 2014-2015 (then capital of the Bank has poured another 20.5 billion UAH) increase the authorized capital of VTB Bank six times, to 34.2 billion hryvnia ($1.3 billion). The Bank carried out in several stages, the recapitalization has been called “the largest capitalization of a commercial Bank in modern history of the banking system of Ukraine”.

However, in may 2016, Kostin said that VTB doesn’t see opportunities for business development in Ukraine and can sell it.

“As for Ukraine, we bear substantial losses. We do not see there big opportunities — both economic and political. I think if we had a chance we’d even sold the business,” said Kostin analysts on “investor Day” in London.

At the end of March 2016 at a closed meeting with representatives of the Russian Union of Industrialists and entrepreneurs, Russia’s President Vladimir Putin encouraged Russian businessmen to sell Ukrainian assets, noting that the situation in Ukraine may change.

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