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Statement by Andrey Borodin

Mikhail Zadornov, chairman of VTB 24, informed the media a few days ago that a number of banks in Russia are close to bankruptcy, including some of the top-50 banks. What is interesting in his statement is not that Mr Zadornov acted as though he was a Central Bank spokesman, to whom talk like that would be pardonable, and even not that his statement is yet another one in the list of evidence of unfair competition by Russian state banks, especially now that licenses are recalled almost daily. What is interesting is what state bank representatives (in this case, Mr Zadornov) always keep silence about. One must understand that, without unceasing state support, they would have been close to bankruptcy among the first. Thus, over the past year alone VTB 24 has been issued 40 billion roubles in the shape of a subordinated loan from its parent VneshTorgBank, and in the near future the bank is planning a 200 billion emission, which will also be funded (directly or indirectly) from the state purse.
Of course, it is good to be managing a bank to which the state provides regular (and, in essence, gratuitous) assistance to cover losses and keep it afloat. However, in that position it is impossible to talk objectively about the quality of the banking sector.
By the way, Russia has an NGO “ARB” which on its official website states that it “expresses interests of the Russian banking community.” Judging by its list of significant events and current projects, the interests of the banking community for it end where those of state banks begin. I have no other explanation for the lack of any reaction from ARB to Mr Zadornov’s statement and those of other state-related people.