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Russian banks’ barring from Swift to mean US and Russia sever ties — VTB bank head Kostin

This is a very dangerous situation which no one is interested in, VTB Group CEO Andrey Kostin admits

DAVOS, January 23. /TASS/. Russian banks’ blocking from the international payments system SWIFT in case of tougher sanctions will mean that the United States and Russia break up their relations, VTB Group CEO Andrey Kostin said at the World Economic Forum on Friday.

“We have already created our system which can replace SWIFT. We are also in talks with partners from China. But I want to note that if this [blocking from SWIFT] takes place, US-Russian relations will deteriorate sharply. On the next day US ambassador in Moscow and Russian ambassador in Washington may go away. This has already occurred at the example of US-Iranian relations. The halt to political dialogue and any other relations between the two countries resulted from this,” Kostin noted.

“In fact, this is a situation on the verge of war or a Cold War,” he said, adding that “this is not a matter of VTB or banking system."

“This is a very dangerous situation which no one is interested in.”

VTB Bank foreign debt

There is no problem for VTB Bank to settle its foreign debt, Kostin said.

“Our foreign debt that we have to settle in the next ten years totals $30 billion, of which $4.3 billion or just 2.5%, should be paid off this year. So we do not see a problem for the bank here. And we does not need the Government’s or the Central Bank’s support in this regard,” Kostin noted.

He added that amidst sanctions and due to lack of access to international capital markets the lender receives enough support from the Bank of Russia and the Government in terms of providing capital.