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Putin advises domestic banks to continue working in Ukraine to support its economy

September 22, 2014, 16:16 UTC+3 NOVO-OGARYOVO
“No doubt, this work should be continued, first of all, because Russian financial institutions account for over 30% of the Ukrainian banking sector,” the Russian president said
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© ITAR-TASS/Mikhail Klimentyev

NOVO-OGARYOVO, September 22. /ITAR-TASS/. President Vladimir Putin said on Monday Russian banks should continue operations in neighboring Ukraine despite losses to prevent the Ukrainian economy’s collapse.

“No doubt, this work should be continued, first of all, because Russian financial institutions account for over 30% of the Ukrainian banking sector,” Putin said at a meeting with VTB Bank head Andrei Kostin.

“If we suspend our work, this would be an additional big and very serious blow on the Ukrainian economy and we are not interested in this,” Putin said.

Russia is interested in having “a reliable and stable partner,” Putin said.

“That is why this work needs to be continued, despite all difficulties. Moreover, as far as I understand, we have quite partnership relations with the Central Bank of Ukraine,” the Russian president said.

VTB facing difficulties

Kostin said that state-run VTB Bank, Russia’s second largest banking institution by assets, was experiencing big difficulties in Ukraine.

“The problems are related to a sharp deterioration of the Ukrainian economy, falling growth rates and a quick devaluation of the national currency, the hryvnia,” the VTB Bank chief said.

In general, the political situation and the war in Ukraine have sharply loosened the payment discipline, Kostin said.

VTB Bank is today recovering only a half of loans it has issued, the banker said.

VTB Bank’s losses in Ukraine have amounted to 26 billion rubles ($670 million) since the start of the year and “I believe they will double by the end of the year,” Kostin said.

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