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Andrey Kostin: «VTB is the only Russian state-owned company, which managed to sell a 10% stake last year»


– Andrey Kostin is the CEO of VTB Bank, one of Russia's largest, he joins us now. Mr. Kostin, what do you think of the downgrade that came through from Moody's for all these big international banks?

– Well, I think the financial situation in the world is quite serious nowadays, and of course we are watching very carefully what is happening to Greece. I still believe that American banking sector is quite in good shape, Russian banking sector is quite in good shape as well, so I hope in overall the world financial situation is not as bad as probably one can expect.

– Yes. Hey look, the government is indicating today that it is looking to sell, we saw that the government in Moscow today is saying that they will probably sell down to 25% stake in your institution in 2012-2013. What are the chances of that happening by the end of the year?

– Well, you see, I think it can be a target. The government is saying that first of all, of course, it's subject to market conditions, and secondly, Mr. Putin said in his speech yesterday that we should find a proper slot for it. The government should not sell it at any price, though the government has here, I would say, a more strategic, ideological target to privatise the economy, rather than to get extra cash into the budget. So I think it will be a very ambitious task to sell 25% of VTB for the next year and a half. Particularly, as you know, we have another Russian bank, Sberbank, which is also trying to sell another 7% of its stake, but we are working on this for some time. VTB was the only Russian state-owned organisation, or state company, which managed to sell a 10% stake last year, and we raised more than USD 3 bln on international market. So, we'll continue to work on this, we are interested in the process of privatization, so the management will be working very hard to achieve this result.

– Yes, essentially the government made it very clear they would not be selling these two operations, these two stakes at the same time, as you say, that would be quite difficult to manage. Do you have any idea about who you would like to buy that stake, do you think it will simply just go as part of free float, how do you think that's going to happen?

– You mean our privatisation?

– Yeah.

– You know, we had a very straightforward approach. We had two transactions, one in May 2007, the IPO, and SPO in February 2011. We just went to the open market in 2007, we offered the shares to all institutional investors in Europe and America, in the Gulf and Asia. We offered our shares in Russia in 2007, we did not have any anchor investors. So like some people say it was “something that should be written in a special manual for universities”. It was quite successful, we were 10 times oversubscribed. We continued this approach last year, when we had some anchor investors. But most part was sold just to the open market without any restrictions, without any specific targeting, any specific groups of investors. I think we will continue this approach, but of course, it very much depends on the market. We consider the market today as extremely difficult, so we'll continue to work on this, watching for the market and considering all opportunities. But our major approach is to go to the market, follow the market, and sell to the market.

– Andrey, always a pleasure to see you on our channel, thank you for taking the time. Andrey Kostin, the Chairman of VTB.

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