VTB's losses against the background of the crisis will exceed the anti-record of 2009

VTB this year will record a loss that will exceed the loss of 2009, said the HEAD of the bank Andrey Kostin. Then the negative result amounted to almost ₽60 billion.

According to the results of the first half of 2022, VTB recorded a significant loss. By the end of the year, it will exceed the losses incurred in the whole of 2009, when the economy faced the consequences of the global financial crisis. This was announced to journalists by the chairman of the board of the state bank Andrey Kostin during the Eastern Economic Forum in Vladivostok.

“I won’t talk about financial results yet, but I can say that since July we have started working in profit. July-August were profitable. We hope that the fourth quarter as a whole will be positive in terms of operations, but, of course, the first half of the year meant significant losses. The losses will exceed the losses of 2009, when, in my opinion, we had a net loss of 2 billion (in dollars at the rate of 2009, according to IFRS, the loss amounted to 59.6 billion rubles -),” said the top manager.

According to him, the losses recorded in the first half of the year are connected with three factors.

Kostin estimated the volume of frozen assets of VTB at 600 billion rubles. Finance

“This is an open currency position, these are direct losses associated with the freezing of our funds abroad (first of all, of course, the capital of our foreign banks in Germany, in England) and this, of course, additional reserves, which we also had to take in connection with the introduction sanctions against both our clients and ourselves, difficulties with repayment of foreign currency loans, and so on, ”Kostin listed. He clarified that in the second half of the year, VTB's loan portfolio returned to growth, and the bank is working with borrowers to repay loans, "so the financial result will somehow be adjusted." In general, at the end of the year, VTB will record a negative financial result, but will be able to show net profit in 2023, Kostin estimated.

Earlier, the First Deputy Chairman of the Bank of RUSSIA Dmitry Tulin, in an interview with RBC, estimated the losses of the entire banking sector for the first half of the year at 1.5 trillion rubles. He noted that the losses were mainly suffered by large banks. After the start of the Russian military operation in Ukraine, many of them fell under sanctions , including VTB. In September, the Central Bank will provide the government with its estimates of how many banks with state participation may need capital support and in what volume, Tulin said.

The Central Bank for the first time disclosed the loss of banks in the crisis

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Kostin clarified that the question of a possible additional capitalization of VTB this year is "a subject of great discussion." “We believe that instead of capital, you can simply change the regulator, we are having a substantive conversation about this with the Central Bank. The central bank was at first more specific about removing the surcharges, and now it is talking about a more selective approach. But we believe that in any way it is possible to cancel or suspend the effect of allowances (for capital -). For example, in Japan, for banks that are not active in the international arena, the capital [adequacy] level is 4% [instead of 8% in Russia and according to the standards of the Basel Committee on Banking Supervision]. If we get 4%, we don’t need anything else, and for a long time, ”said the head of VTB. He advocated not only the abolition of capital adequacy allowances,

“The Central Bank has already expressed its readiness to give up to ten years installments [by reservation] on the money that is arrested or frozen,” he said. The Central Bank did not publicly announce such terms.

The Central Bank did not see the risk of a repeat of the large-scale reorganization of banks due to the crisis

“If we apply this regulator, a whole set, in principle, we can return to the Basel level in a few years, even if necessary. I am in favor of not reporting a single penny, but regulating this situation in a regulatory manner. <...> It will depend on this (recapitalization of VTB. -), but I am against giving real money. Our dialogue with the Central Bank is not over yet,” Kostin stressed.