Vnesheconombank Chairman Vladimir Dmitriev’s Interview to TV Channel Russia 24
CORR: Good afternoon Vladimir Alexandrovich. Thank you very much for finding the time to talk with us. Let us sum up what has been just said at the conference especially under conditions of sanctions. What instruments – financial, administrative – do our exporters need the most?
Vladimir DMITRIEV, Vnesheconombank Chairman: Exporters in all spheres need to have industrial exports support institutions. At the Conference today we have said that a system of industrial exports comprehensive support is in place in our country. It is comprised of the Russian Economic Development Ministry, the Russian Ministry of Industry and Trade and development institutions themselves that are responsible for providing support. They include Vnesheconombank – Bank for Development and Foreign Economic Affairs, the Export Insurance Agency of Russia (EXIAR) and Russia’s largest leasing company VEB-Leasing, which is Vnesheconombank’s subsidiary. We also mentioned the fact that by creating this system we provide exporters not only with financial and insurance support but also with necessary information resources, which are of primary importance for exporters to know what mechanisms are available for Russian exporters to promote their products to foreign markets.
CORR: As far development of these institutions is concerned, last week you approved Strategy 15-20 and it was not a basic version but an upgraded one. What sort of version is it? What are its main points?
Vladimir DMITRIEV: In fact, last week we had a meeting of Vnesheconombank’s Supervisory Board, which approved a program of Vnesheconombank’s development, we call it a Strategy. Several versions were offered. Despite everything: despite a serious situation with the budget, despite the sanctions, our country should develop and development institutions should develop and be instrumental in developing the Russian economy. So, an upgraded version was approved. It provides for Vnesheconombank’s loan portfolio to increase to 2.5 trillion rubles by 2020. And an important thing is that Russian industrial exports with the assistance of Vnesheconombank and its subsidiaries will be provided with a support of 750 billion rubles, with 500 billion rubles accounting for credit support and 250 – for guarantee support. Of course, we hope that our subsidiaries will be supported and additionally capitalized, here I mean above all Roseximbank and this will enable a Center for Credit and Insurance Support, being created on the basis of EXIAR and Roseximbank, to operate in full strength. It should be kept in mind that Vnesheconombank was established among other things to support small and medium-sized enterprises and our strategy provides for supporting this segment of the Russian economy in the amount of 250 billion rubles. In approving our Strategy, the Government is aware that without the state’s support measures both in terms of liquidity and in terms of the Bank’s capitalization, it would be very difficult, if at all, to achieve the said results. So, these issues were also discussed. We discussed them at the meeting with the Russian Prime Minister where we considered measures for the state’s support of Vnesheconombank including its additional capitalization and the Bank’s fulfilment of obligations it assumed under credit agreements as well as repayment of debts to foreign creditors and capital markets.
CORR: What about the amount? If I am not mistaken, we talked about a basic scenario that provide for about 100 billion and if we talk about an upgraded scenario it must be even more.
Vladimir DMITRIEV: The fact is that under this strategy and given the need to increase its loan portfolio, the Bank is to be additionally capitalized in the amount of at least 30 billion rubles per year. As far as other support measures are concerned, the state believe that it and the Central Bank would expand the range of instruments to provide Vnesheconombank with liquidity. We can feel this support even now and we are grateful to the Central Bank for increasing Vnesheconombank’s limit from half capital to capital upon mutual guarantees of banks and this is more than 500 billion rubles. We are also holding talks with the Finance Ministry about expanding the range of instruments available for Vnesheconombank from the Finance Ministry and we can see positive reaction on the part of the Finance Ministry. I have already said today that in order to implement our strategy of supporting industrial exports we need financial resources to subsidize interest rates and extend credits to foreign importers. Now the Economic Development Ministry and the Ministry of Industry and Trade are considering our requests for an amount of 14 billion rubles - this a total amount of support to subsidize interest rates that we need to ensure the export of Russian industrial products to foreign countries.
CORR.: You have signed another very important agreement with the Export-Import Bank of China for an amount of 2 billion dollars. Do you know what projects you are going to finance with these funds?
Vladimir DMITRIEV: We have discussed concrete projects with our Chinese partners. The projects are associated with supplying Chinese equipment to Russia. I mean above all timber-industrial complex. I would not like to name specific projects now but they deal with timber-industrial complex, mechanical engineering production facilities, that is, sectors where Chinese equipment is competitive with the best foreign analogues.
CORR: And now my last question. On October 28, sanctions against Russia might be reconsidered. What’s your forecast? I guess it’s a thankless job to make forecasts especially about such geo-economic issues. Nevertheless, do you believe that sanctions might be softened a few days from now?
Vladimir DMITRIEV: In this respect, I have a conservative view. I don’t think that our foreign partners are likely to change their approaches to Russia. I believe that their policy toward Russia is linked not only to the situation in Ukraine although they say it is. I think there are deeper reasons. It remains to be seen. But I’d like to stress it once more that this time my position is rathere conservative.
CORR.: Thank you very much for your interview, Vladimir Alexandrovich.
Vladimir DMITRIEV: Thank you.
Vnesheconombank Chairman V.A. Dmitriev’s Interview to the TV Channel Russia 24
TV Channel Russia 24,
INTERVIEW
25.09.2014, 16:50
News agencies keep on reporting news with a mark “economy” and “urgent” related to Vnesheconombank. For example, the Russian Government is to provide Vnesheconombank with 240 billion rubles as well as news about a new fund to support mono-cities. My colleague Alexandra Suvorova will talk now about all this with Vnesheconombank Chairman Vladimir Dmitriev. Sasha, we are on airnow, I’m giving you the floor. Good evening.
Interview
Correspondent Alexandra Suvorova
CORR.: Good evening Dima. We are now receiving information about VEB’s Supervisory Board meeting here at the White Housefrom the horse’s mouth. Good evening, Vladimir Alexandrovich.
Vladimir DMITRIEV, Vnesheconombank Chairman: Good evening.
CORR.: My first question deals with the recently most discussed issue –VEB’s additional capitalization. On Tuesday, you had a meeting with Dmitry Medvedev. What agreements were you able to reach? Today, the Russian media informed that 240 billion rubles had been extended to Vnesheconombank. How can you comment on the news?
Vladimir DMMITRIEV: In fact, on Tuesday we discussed issues with the Prime Minister, our Bank’s Supervisory Board Chairman. They were related to our Bank’s potential additional capitalization and to providing it with liquidity for it to fulfil its obligations both to its creditors and borrowersunder the credit agreements we had signed. The Bank needs 240 billion rubles to fulfil its obligations to borrowers, above all, Russian borrowers we signed binding agreements with. A decision to provide VEB with various kinds of state support was taken at the meeting for it to fulfil the said obligations. Moreover, we also said that the state should also think about assisting Vnesheconombank in repaying credits and bond issues,maturity of which comes due next yearand the amount is as much as 70 billion rubles. Our request was met with understanding, and after the meeting, we were instructed to consider various forms of state support for Vnesheconombank together with economic bloc ministries and the Central Bank. . But in this case I’d like to stress that we are not after any exclusiveness for our Bank because we are well aware that a whole number of banks are affected by sectoral sanctions and the state can’t help leaving them without support. But the state should help not only banks but also companies for them to avoid negative consequences fortheir financialsustainability and failure to fulfil obligations to their creditors and partners. Our Bank needs additional capitalization to go on funding projects of national importance as well as supporting industrial exports and small and medium-sized enterprises. These are priorities of Vnesheconombank’s strategy up to the year 2020, which we are to submit to consideration by our Supervisory Board. Under this strategy, and in line with the current trends of the Bank’s development, we raise a question of the Bank’s additional capitalization for it to meet key financial sustainability standards and above all maintaining capital adequacy ratio at a level of no less than 10 percent because it is this level that is specified in our credit agreements andEurobond issue prospectuses.An initial amount of support is 30 billion rubles, which we need to maintain capital adequacy ratio next year.We are grateful to the Government for making decisions on converting subordinated loans worth more than 6 billion dollars, whichwere placed on deposits at our Bank, into subordinated deposits. Thus, our capital adequacy ratio is now more than 14 percent and this allows us to enhance our investment activity.
CORR.: You have already mentioned the Bank’s strategy up to the year 2020. What are its main features?
Vladimir DMITRIEV: Our strategy is based on the so-called Vnesheconombank’s modernization development scenario, which provides for expanding our Bank’s participation in nationally significant investment projects. We have already overfulfilled the strategy we planned to implement until 2015 inclusive, so we need to review it. But we believe that despite the problems faced by our country, Vnesheconombank should play the most important role as a development institution, so our strategy provides for increasing our loan portfolio to 2.5-3 trillion rubles in 2020. We intend to increase our support for industrial exports to 750 billion rubles and our support for small and medium-sized enterprises- to250 billion rubles on average. Industrial exports support is in line with the approved RoadMap which is to be implemented by Vnesheconombank and its subsidiary institutions, for example, Roseximbank, which we are to sell in the short term under the presidential directive to our export insurance agency. A credit-insurance center is also to be created. It will operate as a credit factory responsible for supporting Russian exporters. These are our main objectives and priorities and we have already discussed this strategy at a meeting with the Prime Minister. We expect the Government to support our strategy.
CORR.: There have been a lot ofreports in the Russian mediatoday about VEB’s intention to sell Gazprom’s and Rusal’s shares. To what extent are these reports true and realistic?
Vladimir DMITRIEV: It is certainly not true that we are holding talks on this issue with anybody. The reason for these reports is that our Bank and economic bloc ministries have proposed various options to improve our Bank’s financial standing and provide it with additional liquidity.But it must be understood that the price of the assets we purchasedat that time was a lot higher than their current market price. So, Vnesheconombank together with the economic bloc is expected to explore the possibility of selling these assets on a step-by-step basis so that Vnesheconombank does not sustain losses. Thank you.
CORR.: Thank you very much for finding time for the interview.