Putin tells Russian banks to stay in Ukraine

EPA/YURI KOCHETKOV

VTB24 bank’s headquarters in Moscow. VTB has dismissed the idea that US and EU capital could be quickly replaced with financing from Asia.

Putin tells Russian banks to stay in Ukraine


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Despite unprecedented tense relations between Kiev and Moscow, Russian President Vladimir Putin said his country’s banks should continue operating in Ukraine and help the former Soviet republic remain economic reliable and stable.

The Russian banks’ exit from the country would damage Ukraine’s economy. “No doubt, this work should be continued, first of all, because Russian financial institutions account for over 30% of the Ukrainian banking sector,” Putin told Russia’s VTB bank head Andrei Kostin on September 22.

Kostin said the VTB, Russia’s second largest bank, had lost 26 billion rubles ($670 million) in Ukraine since the start of 2014. “Problems are connected, first of all, with the sharp deterioration of the economic situation in Ukraine, negative growth, rapid devaluation of the national currency, the hryvnia. And in general, the political situation, the war in Ukraine led to a sharp reduction in payment discipline … We have already lost about 26 billion since the beginning of the year. I think [losses] will double by the end of the year,” the bank’s chief executive said.

The Russian president stressed that Russia was interested in having a reliable and stable partner. “That is why, despite all challenges, the work should continue, especially since, as I understand, we have established partnership with National Bank of Ukraine,” Putin said.

Putin said Russia is not interested in hurting Ukraine’s economy by withdrawing from that country’s financial sector, as he acknowledged the “partner-like” relations between Russian and Ukrainian central banks. But Putin warned Russian corporate borrowers that they must be soberly aware of the geopolitical risks and not to expect the state to rush to rescue them unconditionally. “Not all of them fully take into consideration the situation in the international market. Some of them apply for state support (after failing to fulfill their obligations),” RIA Novosti quoted the Kremlin leader as saying. “Everyone must be responsible for oneself,” Putin warned.

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