Quality and Reliability, 1995-1998

 

Despite the bank crisis, which broke out in August 1995, VTB actively increased its operations volume. The Bank developed its economy investment funding, raising long-term funds from international financial institutions. In particular, VTB used these resources to fund the high technology investment project to create the first fiber-optic communication line between Moscow and St. Petersburg.

While implementing its strategic plan to develop the banking network abroad and expanding its activity in the international financial markets, VTB:

• established Russian Commercial Bank in Limassol (Cyprus);
• augmented its share in Donau-Bank (Austria) to 51%, thus making it VTB’s third subsidiary bank abroad.

Thomson Bank Watch, a reputable international rating agency, granted VTB the highest rating among all Russian banks. International Investor magazine placed VTB on the list of the world’s 30 highest liquidity banks. Moody’s rated VTB at Russia’s sovereign rating level, thus confirming its high reliability and financial stability. In terms of capital, VTB became 315th in The Banker’s top 1000 world banks.

VTB was one of the first banks in Russia to obtain a license to carry out custody activities, which allowed it to gain a foothold in the Russian custody services market. Euroclear, major international clearing house, selected VTB as a depositary for Russian securities.

In 1997, the government decided to transform VTB from closed joint-stock company into an open JSC. The Bank of Russia became the largest Bank’s shareholder, with 96.8 per cent of stock.

Owing to its careful and conservative policy, VTB managed to ensure stable operational profit. Amid severe financial crisis, which broke out in Russia in 1998, VTB duly provided settlements and made payments under its obligations to customers and counterparts. VTB, unlike many other large credit institutions, managed to avoid bankruptcy. During the 1998 financial crisis, VTB preserved its solvency, which favored further consolidation of the Bank’s market position.

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