Kostin told what awaits depositors of dollar deposits if the US imposes sanctions against VTB, and what to expect from the ruble. EU Court upholds sanctions against VTB, VEB and Sberbank VTB Bank fell under sanctions
The black line continues. Oleg Deripaska lost financial support from VTB due to US sanctions. This was stated by the head of the bank Andrey Kostin. And not just anywhere, but in an interview with the American television channel CNBC.
We no longer give him new loans, we do not conduct any transactions with him, with Rusal and his other companies. We are awaiting decisions from the Office of Foreign Assets Control (OFAC) of the US Treasury.”
Kostin stated in a television interview with the Americans.
Experts started talking, the head of VTB in this interview made it clear to Western partners: he is his own and is not going to change his liberal orientation to a patriotic one. Therefore, he is ready to unquestioningly follow the instructions that come from across the ocean. Andrey Kostin is trying to sit on two chairs - and keep a chair in the leadership of the second largest bank with state participation, and at the same time please his foreign curators.
"Part of them ( oligarchs- approx. Tsargrad) is facing a fork - either go to the United States to bow and, in fact, choose a new homeland with money, or choose a homeland, but risk money. The choice is unpleasant, but it was determined from the very beginning, ”political scientist, associate professor at MGIMO Kirill Koktysh told a Tsargrad correspondent.
To help the domestic oligarchy with double standards could decide new law, which has so far stalled in the State Duma. It provides for criminal liability for compliance with anti-Russian sanctions. Parliamentarians approved it in the first reading last week, but immediately after, amazing metamorphoses began. The Russian Union of Industrialists and Entrepreneurs (RSPP) called the adoption of the bill categorically unacceptable. The RSPP noted that the document creates risks of unjustified criminal prosecution for both Russian citizens and foreigners.
Chairman of the Russian economic society them. S.F. Sharapova, Professor Valentin Katasonov recalled that “RSPP members are companies in which the main positions are occupied by foreign investors, foreign shareholders.
We are deceived by these signs. Someone knows, someone does not know, but, for example, there are a lot of foreign shareholders in Lukoil and even more than Russian ones. We have repeatedly spoken about Sberbank - and so, this is a sign,
He clarified.
The sign worked - the oligarchy won an intermediate victory. The State Duma listened to the claims of the RSPP and postponed consideration of the bill for an indefinite period.
We believe that this is an absolutely reasonable decision. If you remember, when we discussed the law in the first reading, I asked the authors whether such a situation would arise? And, unfortunately, my fears were justified. Businesses have questions. I think it is possible to find a construction in which these fears can be removed for the second reading,”
State Duma deputy Valery Gartung said.
However, the expert community doubts whether the bill will go to the second reading. Too many people are interested in the document being shelved. Mr. Kostin was not ordered to be friends with Deripaska.
Oleg Deripaska. Photo: www.globallookpress.com
And his company is not ordered to lend. And the fact that the voluntary implementation of sanctions is a blow to the country's most important aluminum industry, the head of VTB does not worry much.
The lack of long-term investments could have a negative impact on Russia's competitiveness. This was stated CEO"Rusal" Alexander Buriko at the plenary session of the "Stolypin Forum":
Other conditions are needed to stimulate growth. In order to attract investments, we must be competitive with other countries, we need transparent conditions for doing business for a long time. It's a long investment."
However, the fact that the concept of social responsibility is alien to Andrei Kostin was known before. VTB Bank has not yet opened a single branch in the Crimea and Sevastopol.
“When IMF Managing Director Ms. Lagarde was asked if the West was going to lift sanctions, she laughed and said why would we lift sanctions against you when your state is yours? state banks does he apply these same sanctions against you? - Economist Mikhail Delyagin recalled in an interview with a correspondent from Tsargrad. - Why should the West treat Russia better than the Russian state itself treats itself? I'm sorry, I have a choice. You serve Russia or you serve the enemies of Russia. With a government like the Medvedev government, with Nabiullina in the Bank of Russia, destroying Russia is a significant best business than to build Russia. As far as I can tell."
However, Andrei Kostin himself, who diligently implements US sanctions, may become bargaining chip in the hands of their Western partners. Like Deripaska, Kostin saw his name on the sanctions lists. In an interview with CNBC, and 2 months later, he could not hide his surprise at this fact.
“I am recorded as a high-ranking official, which I am not. I am the chairman of the board of one of the leading commercial, international banks. I have nothing to do with the undermining of American democracy, hacking attacks or the actions of the authorities in Syria, which were cited as reasons for imposing sanctions. The entire banking community of the world knows me as a banker, ”Kostin justified himself.
The banker, who is accustomed to servility to the West, will still have to make a choice. The dualism of consciousness is no longer valuable. Delay may cost the head of VTB reputational losses both in Russia and in the United States.
Which country do you choose, Mr. Kostin?
President, Chairman of the Board VTB Andrey Kostin, as part of the Eastern Economic Forum, told what to expect in the near future from the ruble, commented on the minister's statement economic development Maxim Oreshkin that it is time for the Russians to sell dollars, and also said what to expect for clients who placed dollar deposits with VTB if the bank falls under US sanctions.
Recall that VTB Bank and its head are already under sanctions. In April 2018, the US Treasury published on its website a sanctions list of 26 names, among which was Kostin.
And since August 1, 2014, VTB Bank has been under EU sectoral sanctions, according to which citizens and companies of the European Union are prohibited from buying or selling new shares, bonds or "similar financial instruments"with a circulation period of more than 90 days, issued by banks included in the sanctions list. It's about about Russian financial institutions, in which the share of state ownership reaches more than 50%, their "daughters" and those who act on their behalf. The ban applies to valuable papers, which can be transferred from one market participant to another, that is, shares, depositary receipts, bonds, and instruments money market(bills, certificates of deposit, commercial paper). But VTB can attract loans from EU banks.
However, in August 2018, a bill was published on the website of the US Congress to sharply tighten US sanctions against Russia. Document S.3336 entitled "On strengthening NATO, combating international cybercrime and imposing additional sanctions on Russian Federation"suggests to introduce new restrictions on the financial sector of the Russian Federation. In particular, it is proposed to impose a ban on operations and freeze the property in the United States of "several financial institutions", including VTB, as well as the Bank of Moscow, which was merged with VTB. The current sanctions prohibit only attracting new debt and equity financing in the US, while the new proposals may actually mean the impossibility of standard dollar settlements through correspondent accounts in US banks.
Speaking about the risks for the bank's clients, Kostin said that their dollar deposits will not be affected, as there are risk protection mechanisms. In an interview with Business FM, he said that November would be a new test for the ruble.
"I still hope that global sanctions against financial institutions, or even the largest ones, will not come. There is such hope, but we'll see ... We have a lot of dollars now. If people run to withdraw money, we will give it to everyone," he said. Kostin, noting that options for transferring dollar deposits to other banks are also being considered in the bank, if they redeem the deposits, and payment in rubles at the current rate.
According to the head of VTB, Russia should generally get rid of settlements in dollars. He cited Turkey as an example, where President Recep Tayyip Erdogan is "an ardent supporter of settlements in national currency", and also recalled the call of the ex-president of the Bank of France, Christian Neuer, who back in 2014 spoke in favor of the need to trade for the yuan or for the euro - "anything but the American currency."
As Kostin notes, the US uses the dollar as a weapon, as political pressure. "This is purely a measure of political pressure actually on the policy of a particular country, the more, of course, there will be a desire to get away from the dollar," the head of VTB said.
It may take "twenty years" to move away from dollar settlements, he said, but the process is bound to happen, as evidenced by the response to US sanctions policy.
"Now the Ministry of Finance is working, in my opinion, to give carrots to those companies that will trade in the national currency, in terms of currency legislation, registration ... And they, the companies, say: you give us a good mechanism, give us incentive, we will do it.But in terms of banking services, I think we have created an absolutely adequate mechanism that allows us to do all this," the head of VTB assures.
As for the appeal of the head of the Ministry of Economic Development Maxim Oreshkin to the Russians to refuse the dollar, then, according to Kostin, he "was one of the brightest economists and leaders when he worked at VTB." "I agree with him - there are reasons that will contribute to the growth of the ruble. But I have to wait until November, see if the sanctions for our enterprises, the economy are so bad ... As for the forecast, I think that the rate ( the refinancing rate of the Central Bank, the decision on which will be made on September 14 - approx. ed.) will be preserved. I guess central bank, although he now understands the increased risks, he also understands, in my opinion, that this cannot be done. Because the reverse trend always generates uncertainty and confusion in the market," Kostin said, noting that the rate of 7.25% is quite acceptable for the current inflation rate, which is projected to be 4.5% per year.
Further tightening of US sanctions against Russia would be tantamount to declaring "economic war", VTB Bank CEO Andrey Kostin told Bloomberg. According to him, this wording is quite fair, since the new sanctions are designed to exert not only economic, but also political pressure.
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As Moscow prepares for a possible tightening of the US sanctions regime, the head of Russia's second-largest bank said that further expansion of sanctions would be tantamount to announcing " economic war, writes Bloomberg.
« I call it an economic war, because its goal is to put pressure on Russia, not only economically, but also politically., - Andrey Kostin, head of VTB, said in an interview with the agency. — Personal sanctions, which would be the lesser evil, don't bother me that much».
Russia, recalls Bloomberg, is waiting for the publication of the report of the US Treasury, which will become the basis for further measures in relation to both individuals and companies. This document is expected to contain a blacklist of the Russian elite, drawn up in response to the alleged “ intervention» Moscow in the US elections.
Kostin, who is already attending the 23rd World Economic Forum, noted that he was going to attend Donald Trump's speech, as well as hear his moderate anti-globalization position. According to the head of VTB, new sanctions against banks will only further worsen relations between Russia and the United States.
Inclusion in this list does not mean the immediate entry into force of those punitive measures that have already been applied to Russian individuals and legal entities due to " intervention» in the American elections or involvement in the Ukrainian issue. However, even the very prospect of being on this list stirred the Russian elites, who began to try to get out of the blow.
Last week, Russia turned the newly nationalized big bank in a key lender to the defense industry, which limited the role of several larger banks - VTB and Sberbank - in the strategic business. Moscow may have taken such a step to protect these banks from a new package of sanctions.
Although VTB has been under sanctions since 2014 after “ annexations» Russia of Crimea, under the new sanctions regime, Russian companies may lose access to the American financial system and their US property could be confiscated.
« We know very little about possible sanctions, so we just have to wait until next week, when the US Treasury was going to announce certain measures or announce certain lists", - concluded Kostin.
source Bloomberg USA North America tags- 03:00
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The statement notes that American companies and individuals are prohibited from extending loans to listed banks for a period of more than 90 days.
In addition, transactions are prohibited, as well as other actions with new shares of credit institutions and debt instruments. Other operations are allowed.
Despite the fact that three Russian state-owned banks fell under the sanctions, the largest of them, Sberbank, is not yet on the black list.
This may be due to the fact that the retail segment is highly developed and as a result of the introduction of sanctions measures, wide sections of the population may suffer, or with the presence of almost 300 thousand minority shareholders in it.
However, the latter, according to US law, is not in itself an obstacle to the imposition of sanctions, because more than 50% of the shares of Sberbank are controlled by the state (50% plus one share belongs to the Central Bank of the Russian Federation). “There is some difference: in the case of Sberbank, its controlling shareholder is not the state, not, but the Central Bank. Sberbank is the largest financial institution in Russia, which may be why it was removed from the risk of sanctions. The main share in his balance sheet is occupied by corporate clients, ”the Sovlink analyst points out. It is not yet clear whether the retail bank VTB24 will fall under the sanctions. VTB, RSHB, and Gazprombank, which were under sanctions, are primarily corporate banks. not explicitly mentioned in the US Treasury Department statement, but previous US sanctions extended to those legal entities in which the parent company owns more than 50%. In this case, VTB almost completely controls VTB24, so falling under the sanctions can happen automatically. However, experts have a different opinion. “VTB24 operates under a separate license. If it's not on the list, then it's not. If VTB, as a holding, issued bonds, then they are subject to restrictions, ”says chief economist Natalya.
At first glance, the adopted sanctions were not so tough.
Banks will continue to carry out short-term operations, work with open credit lines, keep all current settlements (which could be frozen due to sanctions), their balances on correspondent accounts in foreign banks(as happened in the case of previously sanctioned SMP Bank and).
The United States does not restrict the right of bank customers to use payment processor cards and MasterCard. “The new package of US economic sanctions does not affect Visa operations in Russia and does not oblige Visa to suspend or block the operations of financial institutions that are subject to sanctions, or banks that service payment cards under their sponsorship. We continue to process transactions in normal mode”, — reported in the press service of the payment system.
However, according to experts, the measures introduced are more than enough to be felt by every borrower and the state as a whole.
According to Orlova, the banks that have become the object of sanctions are left with two options. They may go to Asian overseas markets to raise funds, but Asian investors are not well aware Russian market, are afraid of claims from the United States and possible fines. It is more realistic to replace external bond issues with domestic ruble funding. Even if Central Bank there is no desire to support state-owned banks in emergency volumes, he will have no other choice, otherwise the economy will go negative.
“The central bank has become a hostage of the situation. Rate hikes are action-driven, but if the regulator does not take action, rates could rise by 3 percentage points. If the Central Bank does not compensate for the decreasing funding, then the economy will shrink, defaults will go, ”says Orlova.
If the Central Bank does not support banks, the rate increase will occur not only in the banks that fell under the sanctions, but will also spread to the entire market. However, an increase in rates is still unlikely. the Central Bank and Good times increased lending to banks, but now the needs are increasing. At present, the Central Bank finances 9% of banking assets and, given this level of support, cannot refuse banks the necessary funding. The regulator has already announced that it is ready to take measures to support VTB, RSHB and the Bank of Moscow after the introduction of US sanctions against them. The message of the mega-regulator notes that, if necessary, “adequate measures will be taken to support these organizations in order to protect the interests of their clients, depositors and creditors.”
The Bank of Moscow "Gazeta.Ru" noted that the bank is focused on working in the domestic market and its business does not suffer from the sanctions imposed. “Funding from external borrowings is insignificant and does not exceed 2% of the bank’s balance sheet currency,” the bank’s credit institution. Borrowings in foreign currency were last carried out by the previous management in 2010. The Bank has not planned and does not currently plan to borrow in foreign markets. Clients of the Bank of Moscow will not suffer from sanctions either: all client accounts are located on the territory of the Russian Federation, no restrictions were imposed on them, they say in the bank. Plastic cards The bank can also be used without restrictions both in Russia and abroad.
Other banks were also quick to reassure customers that the sanctions would not affect their operations.
“VTB strictly complies with all legislative norms, including the requirements of the US regulatory authorities, which they are well aware of. Thus, we consider this decision as exclusively politically motivated, unfair, contrary to legal framework and causing mutual economic damage,— reported in the press service of VTB, emphasizing that the bank can attract resources not only in Western markets. A member of the Supervisory Board of Rosselkhozbank admits that, like any other banks that have fallen under sanctions, Rosselkhozbank may apply for support, which “would be quite normal.”
At 15-56 MSK, VTB shares sank 1.87% (at RUB 0.03937 per share), Sberbank shares rose 2.17% (at RUB 74,79 per share). The index rose by 1.95%.
A court in Luxembourg considered the imposition of sanctions by the European Union against Russian state-owned banks justified. This decision can be appealed to the highest court of the EU
Photo: Maxim Stulov / Vedomosti / TASS
The European Court of General Jurisdiction in Luxembourg (the first instance of the judicial system of the European Union) refused to satisfy the claims of Sberbank, VTB and Vnesheconombank (VEB) to lift the sanctions imposed on them, according to a court press release (*.pdf).
“The court ruled that the grounds for imposing sanctions given by the EU Council were sufficient, and the way these grounds were set out allowed the affected companies to ascertain the reasons for the restrictive measures and challenge them,” the report says.
The primary argument of the Russian plaintiffs was that, in their opinion, the acts of the EU Council on the adoption of sectoral sanctions in relation to specific Russian companies and banks are deprived of substantive arguments for the application of such sanctions.
At the same time, lawsuits to lift sanctions filed by Rosneft, Gazprom Neft and Almaz-Antey, as well as Prominvestbank (Ukrainian subsidiary of VEB) and Turkish Denizbank (former subsidiary of Sberbank) were brought to court. Decisions of the Court of General Jurisdiction can be appealed to the European Court of Justice, which is the highest instance of the EU judicial system, within two months.
“Vnesheconombank reserves the right to appeal the decision on appeal,” Igor Krasnov, Senior Vice President and Head of VEB's Legal Directorate, explained to RBC. According to him, VEB is currently conducting a legal analysis of the decision made by the court.
“Obviously, the sanctions against Vnesheconombank were imposed only for the activities of Vnesheconombank to diversify the Russian economy, and not as a result of illegal actions in the territory of other jurisdictions. These circumstances were confirmed by the representatives of the defendant in court, who stated that there was no evidence of the involvement of Vnesheconombank and its management in actions outside the legal framework. VEB in its activities on the territory of foreign states complies with the norms current legislation", - said Krasnov.
Sberbank, VTB and VEB (as well as Rosselkhozbank and Gazprombank) came under EU sanctions at the end of July 2014. At that time, EU citizens and companies were banned from buying or selling new shares, bonds or “similar financial instruments” issued by Russian state-owned banks with a maturity of more than 90 days. Later, the list of restrictions imposed was significantly expanded. In October 2014, Sberbank decided to impose sanctions, followed by similar claims by VTB and VEB.
VTB, in particular, explained to the court what is an international commercial bank and has nothing to do with the conflict events in Ukraine. The imposed restrictions cause significant damage to the bank and its subsidiaries, including in Ukraine, VTB argued. As follows from the court decision, VTB presented the court with a document confirming the extent of the losses.
Banks subject to European sanctions are also the Council of the EU in violation of their fundamental rights enshrined in the European Convention on Human Rights, which guarantees the right to protect property, business and reputation.