VTB Bank

JSC VTB Bank
ПAO
Traded as MCX: VTBR
LSE: VTBR
Industry Banking
Founded 1990 (1990)
Headquarters Moscow, Russia
Area served
 Russia, CIS, Europe, Asia, Africa, U.S.
Key people

Andrey L. Kostin
(President and Chairman of the Management Board)

Anton Siluanov
(Chairman of the Supervisory Council)
Services Financial services
Revenue Increase RUB 460.2 billion (2017)[1]
Increase RUB 159.7 billion (2017)[1]
Increase RUB 120.1 billion (2017)[1]
Owner Federal Agency for State Property Management (60.9%)[2]
Number of employees
 96 167 (2017)
Rating Ba2 (Moody's), BB+ (S&P) (2017)[3]
Website vtb.com
Old logo

VTB Bank (Russian: ПАО Банк ВТБ, former Vneshtorgbank, lit. foreign trade bank) is one of the leading universal banks of Russia. VTB Bank and its subsidiaries form a leading Russian financial group – VTB Group, offering a wide range of banking services and products in Russia, CIS, Europe, Asia, Africa, and the U.S. VTB 24, formerly a subsidiary, was fully integrated into VTB Bank on January 1, 2018.

VTB was ranked 446th on the FT Global 500 2012,[4] The Financial Times’ annual snapshot of the world's largest companies. It climbed to 210th in the ranking of the 500 largest companies in Europe, the FT Europe 500 2014,[5] and to 127th in the FT Emerging 500 2014, the list of the 500 largest companies on the world’s emerging markets. The Moscow-based bank is registered in St. Petersburg and came 66th in the British magazine The Banker’s Top 1,000 World Banks in terms of capital in 2014.

History

1990: Russia’s Foreign Trade Bank (Vneshtorgbank) was established with the support of the Russian State Bank and the Ministry of Finance. It was set up as a limited liability company with the aim of servicing Russia’s foreign trade operations and promoting Russia’s integration into the global economy.

1997: The bank was converted into a public company, majority owned (96.8%) by the Russian government represented by the Central Bank

2002: The bank’s stocks were transferred to Russia’s Ministry of State Property.

2004: The bank acquired a majority stake (85.81%) in Guta Bank, which was struggling with liquidity problems and experiencing serious financial difficulties. The new acquisition was reorganised into a retail bank, Vneshtorgbank 24 (VTB24). The bank also acquired the Armenian Armsberbank, which was later renamed VTB Armenia.

2005: The bank acquired 75.5% plus three shares of the Promstroybank (PSB), which was reorganised as Bank VTB North-West and later became VTB’s North-Western Regional Centre.

2006: Vneshtorgbank and Vneshtorgbank 24 were rebranded VTB and VTB 24. The bank set up a subsidiary, VTB Africa in Angola, and bought the Ukrainian bank Mriya, which was later merged with VTB Bank (Ukraine).[6]

2007: The bank took over Slavneftebank in Belarus, later renamed VTB Belarus. VTB was the first Russian bank to offer an initial public offering (IPO), raising $8 billion in what became the largest international banking IPO at the time.

2008: VTB set up a subsidiary, VTB Kazakhstan.

2009: The bank acquired AF Bank in Azerbaijan from AF Holding International, later renamed VTB Azerbaijan.

2010: VTB bought a 43.18% stake in TransCreditBank from Russian Railways.

2011: VTB invested more than $191 million for shares in the Isle of Man company DST Investment 3[7] which was roughly than half of the funds in Yuri Milner's DST Global.[8] This led to Milner's large stake in Twitter.[8][7] Kanton had almost no investment in Twitter.[8] DST Investment 3 also issued shares to Alisher Usmanov's Kanton that were used to support the Kremlin's investment in Facebook.[8]

2011: VTB sold a 10% stake to foreign investors 2011. The deal yielded over 95 billion rubles for the Russian government. The bank pioneered in realization of privatization plan for state-run companies. As a result of the privatization, the government’s stake in the bank’s equity decreased to 75.5%.

By the end of December 2011, VTB had increased its stake in Bank of Moscow to 94.84%.[9]

2012: VTB increased its stake in TransCrediBank to 99.6% after buying more stock from Russian Railways.[10]

2013: VTB carries out additional share issue. As a result of the SPO the Russian government’s share in VTB has decreased by almost 15%.[11]

7 May 2014: VTB transferred most of its DST Investment 3 to Kanton.[8][12]

29 July 2014: the Office of Foreign Assets Control (OFAC) published that the Bank of Moscow and VTB Bank OAO, which is the second largest bank in Russia, has been added to the Sectoral Sanctions Identifications List.

31 July 2014: VTB Bank and its subsidiaries was added to the European Union sanctions list due to its role in the 2014 Crimean crisis.[13]

6 August 2014: VTB was added to the Canadian sanctions list due to its role in the Ukrainian crisis and the Russian downing of Malaysia Airlines Flight 17.[14]

13 August 2014: United States clarifies entities under sectoral sanctions. United States increases its sectoral sanctions on VTB Bank together with its subsidiaries (“the VTB Group”) and the Bank of Moscow through its parent bank, VTB Bank OAO, and other entities that VTB has 50% or greater ownership either individually or in the aggregate, either directly or indirectly. Also, US persons cannot use a third party intermediary and they must use caution during "transactions with a non-blocked entity in which one or more blocked persons has a significant ownership interest that is less than 50% or which one or more blocked persons may control by means other than a majority ownership interest."[15]

1 September 2014: VTB was added to the Australian autonomous sanctions list for Russia, Crimea, and Sebastopol.[16][17][18]

12 September 2014: the United States issues a consolidated listing of directives associated with Executive Order 13662 sanctions during the Ukraine crisis. For the Russian financial sector, Directive 1 was amended to increase the financial sanctions on the Russian financial sector for "all transactions in, provision of financing for, and other dealings" in new equity or new debt issued on or after 12 September 2014 to longer than 30 days maturity. New equity or new debt issued from 29 July 2018 until 12 September 2018 was sanctioned if longer than 90 days maturity.[19][20][21][22]

24 September 2014: VTB is sanctioned by Japan for Russian provocative actions against Ukraine and Japan.[23]

24 July 2015: Approved by Dmitry Medvedev, an agreement was signed between the bank president, Director of Russian Post, Dmitry Strashnov, and Minister of Communications and Mass Media, Nikolai Nikiforov, on the Russian Post purchase of 50% minus 1 share of Leto Bank (Summer Bank) from VTB24, with the purpose of reorganising it into the National Post Bank. The remaining 50% plus one share will be owned by VTB24 of VTB Bank. VTB CEO Kostin suggested appointing Dmitry Rudenko, the current head of Leto Bank, as the head of Post Bank (Russia).[24]

28 January 2016: a set of documents was signed between VTB24 and Russian Post on establishing the Post Bank. Russian Post purchased 50% minus 1 share of the newly established Post Bank through its 100% subsidiary. The remaining 50% plus one share is owned by VTB24 of VTB Bank. Dmitry Rudenko, the head of Leto Bank of VTB24, became the head of Post Bank (Russia).[24][25][26][27]

15 March 2017: Ukraine imposed sanctions against VTB Bank and subsidiaries because of the ongoing Russian interference in Ukraine.[28][29]

28 November 2017: the United States increases the Executive Order 13662 sanctions to the Russian financial sector. For the Russian financial sector, Directive 1 was amended to increase the financial sanctions on the Russian financial sector for "all transactions in, provision of financing for, and other dealings" in new equity or new debt issued on or after 28 November 2017 to longer than 14 days maturity. New equity or new debt issued from 12 September 2014 until 28 November 2017 was sanctioned if longer than 30 days maturity.[30]

28 December 2017: VTB24 sells two shares to Dmitry Rudenko, the Chairman of the Board of Post Bank. VTB 24 and Russia Post have equal shares in Post Bank: each have 50% minus one share.[31] VTB24 has 1,062 branches.[32]

1 January 2018: VTB acquires VTB24. The integrated network has 1,350 branches.[33][34]

Mergers and acquisitions

VTB Bank took over 12 banks between 2002 and February 2012, including four in Russia, three in Europe, and five in the CIS:

  • Guta Bank (2004), later renamed VTB24[35][36]
  • Bank of Moscow
  • TransCreditBank
  • Armsberbank in Armenia (2004), later renamed VTB Armenia[37]
  • Promstroybank (2005), renamed Bank VTB North-West and later reorganised as VTB’s North-Western Regional Centre[38]
  • Eurobank in France (2005), later renamed VTB France[39]
  • Evrofinance Mosnarbank in Great Britain (2005), later renamed VTB Europe Plc, and then VTB Capital Plc
  • Ost-West Handelsbank AG in Germany (2005), later renamed VTB Germany[40]
  • United Georgian Bank (2005), later renamed VTB Georgia[41]
  • Mriya in Ukraine (2006), later merged with VTB Ukraine[42]
  • Slavneftebank in Belarus (2007), later renamed VTB Belarus[43]
  • AF Bank in Azerbaijan from AF Holding International (2008), later VTB Azerbaijan[44]

Corporate affairs

Shareholders

The main shareholder of VTB is the Russian Government,[8] which owns 60.9% of the lender through its Federal Agency for State Property Management. The remaining shares are split between holders of its Global Depository Receipts and minority shareholders, both individuals and companies.

In February 2011, the Government floated an additional 10% minus two shares of VTB Bank. The private investors, who paid a total of 95.7 billion rubles ($3.1 billion) for the assets, included the investment funds Generali, TPG Capital, China Investment Corp, a sovereign wealth fund responsible for managing China’s foreign exchange reserves, and companies affiliated with businessman Suleiman Kerimov.[45]

In May 2013 VTB completed a secondary public offering (SPO), issuing 2.5 trillion new additional shares by public subscription. All the shares have been placed on Moscow’s primary stock exchange. The government has not participated in the SPO so its stake in the bank decreased to 60.9% after the subscription has been closed. The bank has raised 102.5 billion rubles worth of additional capital. Three sovereign wealth funds Norway’s Norges Bank Investment Management, Qatar Holding LLC and the State Oil Fund of the Republic of Azerbaijan (SOFAZ) and commercial bank China Construction Bank became the largest investors during the SPO after purchasing more than half of the additional share issue.[11]

Management

As of April 2018, its Management Committee consists of Andrey Kostin (Chairman since 10 June 2002),[8] Andrey Kostin President and Chairman of VTB Bank Management Board, Member of the Supervisory Council, Chairman of the Strategy and Corporate Governance Committee, Andrey Puchkov (First Deputy President and Chairman of VTB Bank Management Board), Yuri Soloviev (First Deputy President and Chairman of VTB Bank Management Board), Denis Bortnikov (Deputy President and Chairman of VTB Bank Management Board), Olga Dergunova (Deputy President and Chairman of VTB Bank Management Board), Valery Lukyanenko (Deputy President and Chairman of VTB Bank Management Board), Herbert Moos (Deputy President and Chairman of VTB Bank Management Board), Anatoly Pechatnikov (Deputy President and Chairman of VTB Bank Management Board), Vladimir Verkhoshinsky (Member of VTB Bank Management Board), Maxim Kondratenko (Member of VTB Bank Management Board), Erkin Norov (Member of VTB Bank Management Board), Gennadiy Soldatenkov (Member of VTB Bank Management Board).[46]

Supervisory council

As of April 2017, VTB’s Supervisory Council consists of Anton Siluanov (Chairman), Matthias Warnig (member),[8] Sergey Galitskiy (Independent member of supervisory council), Sergey Dubinin (member of supervisory council), Yves Thibault de Silguy (Independent member of supervisory council), Andrey Kostin (President and Chairman of VTB Bank Management Board), Shahmar Movsumov (Independent member of supervisory council), Valery Petrov (Independent member of supervisory council), Nicolai Podguzov (member of supervisory council), Vladimir Chistyukhin (member of supervisory council), Andrei Sharonov (member of supervisory council).[47]

Financial data

Consolidated Statement of Financial Position as at 31 December 2017: net interest income - 460.2 RUB billion, net fee and commission income - 95.3 RUB billion, operating income before provisions - 592.5 RUB billion, staff costs and administrative expenses - 260.9 RUB billion, net profit - 120.1 RUB billion. [48]

Major subsidiaries

Federation West Tower (in left), is VTB’s Head office in Moscow City, Moscow, Russia
VTB Bank is the owner of the Eurasia Tower in Moscow [49]

VTB's major subsidiaries as of April 2018 were:

Company's nameShare
Insurance company VTB Insurance100%
VTB Capital100%
VTB-Leasing100%
VTB Dolgovoi centre100%
VTB Pension administrator100%
VTB Factoring100%
VTB Registrar100%
Hals-Development96.44%
VTB Arena75.00%
VTB Real Estate100%
VTB Bank (Austria) AG (incl. VTB Bank (Deutschland) AG, VTB Bank (France) SA)100%
VTB Bank (Ukraine)99,97%
VTB Bank (Armenia)100%
VTB Bank (Georgia)96.31%
VTB Bank (Belarus)100%
VTB Bank (Kazakhstan)100%
VTB Bank (Azerbaijan)51 %
Banco VTB Africa, SA (Angola)50.1%
National Post Bank (ex. Leto Bank)50 % minus 1

Corporate social responsibility

The headquarters of VTB Armenia in Yerevan

VTB Bank sponsors sports, cultural and healthcare  charities.

Sports

Since 2017, VTB Bank has been the title partner of the Russian Formula 1 stage in Sochi – Formula 1 VTB Russian Grand Prix.

Since 2016, VTB has been the tennis tournament ‘VTB Kremlin Cup’

VTB has also been the title sponsor of the VTB United League since 2008.

Since 2013, VTB Group has been supporting the city bike rental Velobayk, a project by the Department for Transport and Development of Road Infrastructure of Moscow. In 2018, the number of trips exceeded 3 million.

Culture

VTB is a member of the Board of Trustees for the Bolshoi Theatre, and the non-profit organisation The Bolshoi Theatre Foundation that was established in 2002. VTB has supported many of the premieres at the Bolshoi, including The Lady with the Camellias, Ivan the Terrible, Onegin, The Sleeping Beauty, The Snow Maiden, Romeo and Juliet, The Legend of Love, Manon Lescaut and others.

Since 2006, VTB has been the general partner of the Mariinsky Theatre.

Since 2002, VTB has been the general partner of the Moscow Theatre’s Pyotr Fomenko Workshop.

Since 2002, the bank has been a member of the Board of Trustees for the State Tretyakov Gallery. With the support of VTB, the museum has presented many unique exhibits; among them – the exhibitions of Valentin Serov, Ivan Aivazovsky, Zinaida Serebryakova and Vasily Vereshchagin.

Cooperation between VTB and the Pushkin Museum of Fine Arts begun in 2005. The Bank supports many of the museum’s exhibits such as ‘Venice of the Renaissance, Titian, Tintoretto, Veronese’ and ‘Chaim Soutine, Retrospective’.

The cooperation between VTB Bank and the State Hermitage began in September 2013, where the Bank promotes the museum’s exhibitions and innovative projects. In 2017, with the support of VTB Bank, the museum hosted the exhibition ‘The Winter Palace and the Hermitage. 1917. History was created here’.

Since 2002, the Bank has supported exhibitions by the Russian Museum such as ‘Diaghilev, The beginning’, ‘Nicholas Roerich, 1874-1947’, ‘Vasily Vasilevich Vereshchagin, To the 175th anniversary of his birth’, ‘Kuzma Sergeevich Petrov-Vodkin, To the 140th anniversary of his birthday’.

Since 2014, the Bank has provided charitable assistance to the Jewish Museum and Tolerence Center. In autumn of 2017, VTB helped organise the exhibition ‘To Everyone on Freedom? The history of one people in the years of the revolution’. In 2018, with support from the bank, an exhibition ‘Isaak Levitan and author's cinema’ was held.

Since 2010, VTB Bank started supporting the legendary TV-program ‘What? Where? When?’

Healthcare

VTB also supports healthcare programmes in Russia, and provides support to the elderly, orphans and disabled people, as well as veteran organisations. Within the framework of the Bank’s own charity programme ‘The World without Tears’, which celebrated its 15-year anniversary in 2018, hundreds of children and hospitals from 52 regions of Russia – from Moscow to the Kamchatka Territory – received the Bank’s support. In 2018, the charity event ‘The World without Tears’ was held in 21 cities of Russia.

In addition, for several years from 2014 to 2018, VTB supported institutions that focused on children's health in the Republic of Karelia.

References

  1. 1 2 3 "VTB IFRS Report March 2018".
  2. ↑ 4-traders. "Bank VTB PAO company : Shareholders, managers and business summary - MOSCOW INTERBANK CURRENCY EXCHANGE: VTBR - 4-Traders". 4-traders.com.
  3. ↑ "Рейтинг банков - 2017 (таблица)". Forbes.ru. 23 March 2017. Retrieved 1 May 2017.
  4. ↑ "FT Global 500 2011" (PDF).
  5. ↑ "FT Europe 500 2011" (PDF).
  6. ↑ "VTB hosts Russia-Angola Business Forum". vtb.com.
  7. 1 2 Swaine, Jon; Harding, Luke (November 5, 2017). "Guardian Paradise Papers: Russia funded Facebook and Twitter investments through Kushner investor, Institutions with close links to Kremlin financed stakes through investor in Trump son-in-law's venture, leaked files reveal". The Guardian. Manchester, England. Retrieved February 10, 2018.
  8. 1 2 3 4 5 6 7 8 Drucker, Jesse (November 5, 2017). "Kremlin Cash Behind Billionaire's Twitter and Facebook Investments: Leaked files show that a state-controlled bank in Moscow helped to fuel Yuri Milner's ascent in Silicon Valley, where the Russia investigation has put tech companies under scrutiny". New York Times. Retrieved February 7, 2018.
  9. ↑ "Interfax.com". www.interfax.co.uk.
  10. ↑ ""2012 VTB IFRS Report"" (PDF).
  11. 1 2 "VTB Completes New Offering That Reduces State Stake By 15%", The Moscow Times
  12. ↑ Woodman, Spencer (November 5, 2017). "Russian Connections: Kremlin-owned Firms Linked to Major Investments in Twitter and Facebook, The Russian government quietly held a financial interest in U.S. social media". International Consortium of Investigative Journalists. Retrieved February 10, 2018.
  13. ↑ "COUNCIL REGULATION (EU) No 833/2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine". Council of the European Union. eur-lex.europa.eu. 2014-07-31. Retrieved 2018-02-10.
  14. ↑ "Sanctions List SOR/2014-195". gazette.gc.ca. 2014-08-06. Retrieved 2018-03-07.
  15. ↑ "Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property Are Blocked" (PDF). United States Department of Treasury. August 13, 2014. Retrieved March 22, 2018.
  16. ↑ "Sanctions Regime: Russia". Australian Government Department of Foreign Affairs and Trade. September 1, 2014. Retrieved March 21, 2018.
  17. ↑ "Australia and sanctions: Autonomous Sanctions (Russia, Crimea and Sevastopol) Specification 2014". Australian Government Department of Foreign Affairs and Trade. September 1, 2014. Retrieved March 21, 2018.
  18. ↑ "Australia and sanctions: About sanctions". Australian Government Department of Foreign Affairs and Trade. Retrieved March 21, 2018.
  19. ↑ "Ukraine-/Russia-related Sanctions: Sectoral Sanctions under Executive Order 13662, CAATSA". OFAC. Retrieved March 24, 2018.
  20. ↑ "Ukraine-related Sanctions". United States Department of Treasury. September 12, 2014. Retrieved March 22, 2018.
  21. ↑ "Ukraine-/Russia-related Sanctions; Sectoral Sanctions Identifications (SSI) List: EO 13662 Directives". United States Department of Treasury. Retrieved March 24, 2018.
  22. ↑ "Directive 1 (as amended) under Executive Order 13662" (PDF). OFAC. September 12, 2014. Retrieved March 24, 2018.
  23. ↑ Yoshida, Reiji (September 24, 2014). "Japan passes fresh round of sanctions against Russia over Ukraine". Japan Times. Retrieved March 21, 2018.
  24. 1 2 "Почтовый банк начнет работу с 2016 года" [Post Bank will start work beginning 2016]. lenta.ru (in Russian). September 7, 2015. Retrieved February 12, 2018.
  25. ↑ "В России создан «Почта Банк»: «Почта России» и ВТБ24 подписали пакет документов о создании «Почта Банка». В церемонии приняли участие генеральный директор «Почты России» Дмитрий Страшнов и президент – председатель правления ВТБ24 Михаил Задорнов" ["Post Bank" was created in Russia: "Post of Russia" and VTB24 signed a package of documents on the establishment of "Post Bank." The ceremony was attended by General Director of Post of Russia Dmitry Strashnov and President and Chairman of the Board of VTB24 Mikhail Zadornov.]. Post Bank website (in Russian). January 28, 2016. Retrieved February 12, 2018.
  26. ↑ "В России создан Почта Банк" [In Russia established Post Bank]. VTB24 website (in Russian). January 27, 2016. Retrieved February 12, 2018.
  27. ↑ "Banks: Company Overview of PJSC Post Bank". Bloomberg website. Retrieved February 12, 2018.
  28. ↑ Пороше́нко, Петро́ Олексі́йович (March 15, 2017). "УКАЗ ПРЕЗИДЕНТА УКРАЇНИ №63/2017: Про рішення Ради національної безпеки і оборони України від 15 березня 2017 року Про застосування персональних спеціальних економічних та інших обмежувальних заходів (санкцій)"" [DECREE OF THE PRESIDENT OF UKRAINE No. 63/2017: On the decision of the Council of National Security and Defense of Ukraine dated March 15, 2017 "On the Application of Personal Special Economic and Other Restrictive Measures (Sanctions)"]. President of Ukraine website (in Ukrainian). Retrieved February 28, 2018.
  29. ↑ Пороше́нко, Петро́ Олексі́йович (March 16, 2017). "Глава держави затвердив санкції щодо низки російських банків" [The head of state has approved sanctions against a number of Russian banks]. President of Ukraine website (in Ukrainian). Retrieved February 28, 2018.
  30. ↑ "Directive 1 (as amended) under Executive Order 13662" (PDF). OFAC. September 29, 2017. Retrieved March 24, 2018.
  31. ↑ "ВТБ и «Почта России» стали паритетными владельцами Почта-банка" [VTB and "Russia Post" became parity owners of Post Bank]. RNS.online (in Russian). December 29, 2017. Retrieved February 12, 2018.
  32. ↑ "VTB 24: About". VTB 24 website.
  33. ↑ "Banks: Company Overview of Bank VTB 24 Public Joint-Stock Company". Bloomberg. Retrieved February 12, 2018.
  34. ↑ "ВТБ завершил присоединение ВТБ24" [VTB completed the merger of VTB24]. VTB website (in Russian). January 8, 2018. Retrieved February 12, 2018.
  35. ↑ "Russian banks 'are not in crisis'", BBC News
  36. ↑ "VTB buys GUTA bank for symbolic price - The Russia Journal". russiajournal.com.
  37. ↑ "VTB becomes the sole owner of 100% stake in CJSC VTB Bank (Armenia)".
  38. ↑ "Vneshtorgbank owns controlling interest in Promstroybank".
  39. ↑ "VTB — VTB became the main shareholder of BCEN-EUROBANK". vtb.fr.
  40. ↑ "VTB to Buy Out Foreign Banks for the Budget Account - Kommersant Moscow". kommersant.com.
  41. ↑ "VTB in 2005".
  42. ↑ Sputnik. "Russian VTB buys bank from ex-senior official in Ukraine - paper". rian.ru.
  43. ↑ "vtb buys control slavneftebank 254 mln - Search results from HighBeam Business". business.highbeam.com.
  44. ↑ "VTB holds a controlling interest in AF Bank, Azerbaijan".
  45. ↑ "VTB bank sale launches privatisation drive in Russia", The Telegraph
  46. ↑ "Члены правления Банк ВТБ (ПАО)" [Members of the Management Board VTB Bank (PJSC)] (in Russian). VTB. Retrieved May 18, 2018.
  47. ↑ "Наблюдательный совет" [Supervisory Board] (in Russian). VTB. Retrieved May 18, 2018.
  48. ↑ "VTB Group announces IFRS results for the full year and the fourth quarter of 2017". www.vtb.com.
  49. ↑ "Group VTB has acquired a tower "Eurasia" in the business center "Moscow-city" - FreeNews.xyz". freenews.xyz. Archived from the original on 11 June 2016.
  50. ↑ "Office of Foreign Assets Control (OFAC): Sanctions List Search". Office of Foreign Assets Control (OFAC) website. Retrieved February 12, 2018.
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