President of Russia Vladimir Putin: Mr Kostin, I suggest discussing the bank’s investment activities and your contribution to public-private partnership projects. I know that you are working on this.
VTB Bank Chairman and CEO Andrei Kostin: Mr President, seven or eight years ago Russia’s investment banking services market was dominated by foreign banks, predominantly US banks.
The situation has changed radically since then. VTB Group has become the leader in investment banking services not only in Russia but also in Eastern Europe.
This year, the bank has helped attract over 810 billion rubles to the national economy, mostly through the placement of stocks and bonds issued by Russian companies.
The largest placement transactions involved Finance Ministry bonds and bonds for Russia’s largest private and state-owned companies, including state-owned companies like State Transport Leasing Company and Sovcomflot. Large placements in the Russian market were made on behalf of RZD and RusHydro and the privately owned company Magnit. The latest placement was made on behalf of Russian Post.
We conduct these transactions in both the home and international markets, lately focusing on Russian infrastructure facilities, specifically the Moscow Exchange and the National Settlement Depository. In this way, we are strengthening the national infrastructure, which I believe will eventually become the basic platform for attracting investment to the national economy.
Vladimir Putin: This is good. What about public-private partnership?
Andrei Kostin: As for PPP, we participate in nearly all major PPP projects. Our aggregate investments in these have reached 320 billion rubles.
I have to mention this major project that we will complete by the end of the year, according to plan – the Western High-Speed Diameter, the world's largest toll road project being built through a public-private partnership.
It is worth 210 billion roubles, but as you recently mentioned at a meeting in Crimea, it is not about money, but about building the road. The project will be completed on schedule.
To be honest, I recently flew over the construction site in a helicopter, and I can say that the three bridges that are part of the system are not only technically perfect, but they will further beautify the great architecture of St. Petersburg. I have absolutely no doubt.
Vladimir Putin: Yes, I have seen it. It is beautiful.
Andrei Kostin: I would like to say that we are certainly using those forums that have been established, including the St. Petersburg Economic Forum and the Eastern Economic Forum in Vladivostok. Preparations for VTB’s eighth financial forum Russia Calling! are now in full swing.
I would like to invite you to speak at that forum on October 12. Your speech is already a tradition. It is central to the forum and always arouses great interest among investors from around the world.
Vladimir Putin: All right.
I know that your bank has participated in the placement of government securities.
Andrei Kostin: Yes, Mr. President. It was a success in spite of all the difficulties that we encountered, and we can continue this work if needed; we are prepared for it.
Vladimir Putin: How is your work with individual clients?
Andrei Kostin: The retail loan portfolio is growing now, the situation has improved and we are seeing increased demand.
The reduction in the Central Bank refinance rate is certainly a positive factor, which will lead to a reduction in the cost of loans to individuals, among other things.
Thus, the business is growing, and we are now building up these activities through our subsidiaries – VTB Group as well as its subsidiary Pochta Bank. We expect this work to continue.
Vladimir Putin: Good.