NOVO-OGARYOVO, Russia - VTB could see losses exceed 50 billion rubles in Ukraine due to the sharp decline of the bank's loan portfolio amid geopolitical and economic crisis, but the Russian bank is not planning to leave the Ukrainian market, VTB CEO Andrei Kostin said at a meeting with Russian President Vladimir Putin on Sept. 22.
“Of course [there are problems in Ukraine]. Problems connected firstly with the sharp decline of the economic situation in Ukraine, negative growth rates, and the quick devaluation of the hryvnia, the national currency. And the overall political situation and the war in Ukraine have led to a share drop in payment discipline. We are now being returned only half of what we issued in loans,” he said.
“Our losses have already come to about 26 billion rubles since the beginning of the year. I think they will double by the end of the year,” Kostin said.
“To this we should add acts of vandalism against our offices, direct threats against our employees. All of this naturally shows that the situation there is very complicated for operations and the climate is not simple. But we don’t think it’s worth talking about halting operations there. We intend to continue our activities despite the fact that, of course, the conditions for working there are fairly difficult,” he said.
Putin said he supported VTB’s intentions.
“Work must undoubtedly be continued. Mostly because Russian financial institutions make up over 30% of Ukraine’s banking sector, and if we stop working, this will be an additional large and very serious blow to the Ukrainian economy. And we are not interested in this,” Putin said.
“We are interested in having a reliable, stable partner. This is why despite all the difficulties, it’s necessary to continue operations. Especially since, as far as I see it, our relationship with the Central Bank of Ukraine is a complete partnership,” he said.
