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Russian President Vladimir Putin held a working meeting with VTB Bank Board Chairman and President Andrey Kostin.
V. PUTIN: Mr. Kostin, VTB Group is known to be one of the core Russian financial institutions. Successful functioning of the whole group and the bank in particular greatly influences health of the whole financial system.
State is major VTB shareholder, and last year it was made a lot to reinforce the VTB Bank. As I remember, you issued 2,5 trillion shares and attracted 102 billion rubles. I would like you to describe the results in greater detail.
A. KOSTIN: Mr. President, you are extremely right about today's development of banking sector, which is successful and steady. I can say that this opinion is shared by many of my colleagues, who I work with on a daily basis.
It is already visible, that last year banking sector developed more dynamically than many other branches of our economy. The data for the last year are being summarized now, but you can already notice that Russian banks loan portfolio shows growth about 20 percent, meanwhile consumer loans grew by 28 percent and mortgage loans by 30 percent. These growth rates are quite high. VTB Group growth is even bigger: consumer and mortgage loans added 35 percent and loans to industry grew by 20 percent.
All this is the evidence Russian banking sector dynamic development and it has no system problems. Moreover, I shall tell that starting January 1st we, the bankers, and Central Bank [of Russian Federation] do a very important work on transition to the new standards of banking regulation, so-called «Basel-3», according to resolutions accepted within G20. This work, in my opinion, goes on successfully, and I surmise that compliance to these standards is possible for Russian banks.
I also would like to notice that those decrees, concerning the creation of mega-regulator based on Central Bank, which you approved, have serious positive significance from bankers point of view. That concerns not only the enhancement of regulation and banking sector control, but financial and insurance markets as well, and thus all financial operations. This is very important element and it seems to us that further development of mega-regulator will contribute to further improvements in Russian banking sector.
I also would like to support the Central Bank in its actions, which are widely discussed at present, all this "cleaning" and "sweeping". I would call it the elimination of unfair or insolvent financial institutions from the system. This work is well timed and much needed. Of course, it is quite costly, but if this work is not done, then overall expenses and social consequences would be much greater. I would say that this would not infringe the trust to banking sector, but quite contrary. Numbers defend this point: last year people's deposits grew by 20 percent, and by nearly 27,5 percent at VTB Bank. It means that people still trust our banking system. I think, that purification process will only fortify confidence in our banking sector.