Liquidity Risk

Liquidity risk the risk that potentially influences the Bank's capability to meet its obligations in full when due arising from imbalanced timing of the Bank's assets and liabilities.

Keeping the balance structure in compliance with all liquidity requirements and ratios (both internal and prudential) with permanent control of units in charge and collegial bodies allows VTB to meet its obligations in full when due.

The Bank separates instant and quick liquidity risk management.

Instant liquidity management is the main task handled by VTB in asset and liability operational management. Its aim is to determine and keep up the minimal amount necessary to ensure cash/non-cash balance settlement by currencies.

Instant liquidity management is carried out by the Bank's Treasury by prompt (intraday) determination of VTB's current payment position and payment position change forecast taking into account the Bank's payment schedule and various scenarios. Instant liquidity management in branches is carried out on a decentralized basis by putting in place limits on balance accounts in regional cash and settlement centres at end-of-day in branches.

The main task in quick liquidity management is the change of VTB maturity assets and liabilities structure to mitigate the liquidity gap to the given level by the maturity date for requirements and obligations. This task is fulfilled by on-the-fly determination of current position for quick liquidity risk by determining current quick liquidity gaps in accordance with internal restrictions and restrictions imposed by the Bank of Russia. Quick liquidity management is carried out by VTB head office and branches in a centralized way.