Russia’s VTB: Capitalisation of banking sector likely not needed

CEO of VTB financial institution Andrey Kostin attends the St. Petersburg Worldwide Financial Discussion board (SPIEF) in Saint Petersburg, Russia June 17, 2022. REUTERS/Anton Vaganov

VLADIVOSTOK, Russia, Sept 7 (Reuters) – The top of Russia’s VTB (VTBR.MM), Andrei Kostin, mentioned on Wednesday the nation’s banking sector had largely overcome probably the most severe results of Western sanctions and that systemic capitalisation of Russian banks was doubtless not wanted.

Hit by unprecedented financial sanctions from the West, Russia’s banking sector posted heavy losses within the first six months of the 12 months and officers have pushed lenders to drastically cut back their publicity to the U.S. greenback and euro.

“It’s perhaps too early to say, the central financial institution is now analysing the data, however perhaps some sort of systemic recapitalisation of the banking sector shouldn’t be wanted,” Kostin mentioned at a session on the transformation of Russia’s monetary sector on the Japanese Financial Discussion board in Vladivostok.

VTB, Russia’s second-largest lender returned to revenue in July after file losses within the first six months of the 12 months, and can begin lending within the Chinese language yuan and different non-Western currencies later this 12 months, it mentioned on Tuesday. learn extra

Kostin added later that there was room for Russia’s central financial institution to chop its key fee to 7.5% after which 7% from 8% now to stimulate lending in Russia’s banking sector. learn extra

The Financial institution of Russia subsequent meets on charges on Sept. 16.

Western sanctions on Russia over its actions in Ukraine have lower Moscow off from the worldwide monetary system and from almost half of its $640 billion in gold and overseas trade reserves.

CEO Kostin had mentioned in April Russian banks would doubtless want a wider recapitalisation to deal with losses.

Russian officers have heralded the financial system’s efficiency in current months, saying it’s holding up significantly better than anticipated within the face of sanctions.

Russia Financial system Minister Maxim Reshetnikov on Tuesday mentioned the financial contraction this 12 months could be 2.9%, shallower than beforehand forecast. learn extra

Kostin on Wednesday mentioned VTB expects a 4% GDP contraction, adopted by a 1.5% drop in 2023.

Kostin and different panelists, together with Igor Shuvalov, chairman of Russia’s state improvement financial institution VEB, mentioned Russia’s de-dollarisation drive and the necessity to additional develop settlements and interactions with different currencies, such because the yuan and Turkish lira. learn extra

Reporting by Alexander Marrow and Vladimir Soldatkin; Modifying by Tom Hogue and Muralikumar Anantharaman

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