Russian lender VTB says made extra provisions for risky loans

Published 22/01/2018 in Business News, Economy & Finance

Russian lender VTB says made extra provisions for risky loans
VTB Chief Executive Andrei Kostin attends a meeting in Russia, June 1, 2017. REUTERS/Sergei Savostyanov/TASS/Host Photo Agency/Pool

MOSCOW (Reuters) – Russian lender VTB has set aside 50 billion rubles ($882 million) in additional provisions against losses and agreed with the central bank to monitor a number of riskier loans, VTB’s chief executive told Reuters.

Andrey Kostin’s comments show that major Russian banks are under tighter scrutiny from the central bank, which is on a heightened state of alert following the rescue of three big private lenders last year.

His remarks come just days before Washington is scheduled to draw up a list of Russian businesspeople close to the Kremlin, on which Kostin himself said he may figure. Inclusion on the list could make it harder for the bank to finance itself.

In an interview cleared for publication on Monday, Kostin said the central bank had been conducting checks on VTB’s financial health for 10 months.

“We set aside around 50 billion rubles at the end of last year, of which around a half was recommended by our risk department and around the same amount was set aside based on the central bank’s recommendation,” Kostin told Reuters.

“The central bank has finished checking us, there were a number of issues where we agreed that for half a year we would study how certain loans perform and would afterwards decide whether any other provisions would be needed,” he said.

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    Kostin said the risk of him being on the new list was “quite high”. But he said: “What can I do? Apologize for who I am or aren‘t? I am who I am, and my role is what it is in this country,” Kostin said. “To be honest, I am not very afraid of this.”

    While inclusion on the new list would not automatically lead to sanctions, it could make foreign politicians, banks, and officials reluctant to have any dealings with individuals named on the list.

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