Go Back

Reaction to the Open letter to the Chairman of VTB

In my open letter to Mr. Kostin, the President of VTB, which was published in most of Russian mass media on Monday, I predicted that the destructive position of the bank during the negotiations with the companies who borrowed from the Bank of Moscow can cost a lot to the government and to the tax payers. As it became apparent from today’s information published in ‘Vedomosti’, my prediction starts to come true. According to the newspaper, VTB has addressed the government for the financial aid of 150 billion roubles for supposed ‘disposal’ from the Bank of Moscow of the problematic loans.

I, the former president of the Bank of Moscow for 15 years, am stating with full responsibility that, when I was leaving this organization, there were no problematic loans, especially for such amount. Bank of Moscow has always been stably profitable, for a long period of time generating 1 billion dollar a year profit. All the companies-borrowers of the Bank of Moscow are capable to pay for their debts independently in the conditions of normal functioning.

In connection to this a question arises – why VTB wants to get state help, when objectively the bank does not need it? Who really needs financial help?

I am confident that the state should not give into VTB management wishes. The purchase of the Bank of Moscow, according to the VTB management, was a commercial deal which had a deep economic basis. Deals of such level should be thoroughly calculated while the received assets should be checked carefully. This is exactly what happened in March of 2011, when the Bank of Moscow sale deal took place.

Perhaps, the buyers were disappointed that the Bank of Moscow appeared to be not a bag of cash but a credit organization which has means and assets, which need to be operated. However this is exactly what a credit organization of this level should be like.

The management of VTB with clear mind and persistently went into this sale deal of Bank of Moscow. And if 2 months after purchase they need state aid for a sum of money bigger than it was spend on the deal, then first of all this characterises the level of competency of the new management of VTB.