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Yuri Soloviev: “The agreement between VTB and TELE2 is a legally binding. The deal is done”


Yuri Soloviev: “The agreement between VTB and TELE2 is a legally binding. The deal is done”.

HOST 1: Now, the Cyprus crisis has been weighing on the shares of VTB Group, Russia’s second bank is trading near a three-year low.

HOST 2: Moody’s says VTB has the greatest exposure to Cyprus, loss lawsuits would reach tens of millions of euros. Well, VTB Bank’s First Deputy President and Chairman of the Management Board, Yuri Soloviev is joining us now by phone. Thank you so much. How concerned are you about Cyprus and the impact it will have on VTB?

YURI SOLOVIEV: Good morning. I do believe that the Cyprus situation is absolutely manageable from the VTB point of view. We are delighted by the decision of the Cyprus parliament and the Cyprus government not to proceed with, effectively, steps of nationalization of certain assets, which were proposed several days ago. And we do believe that the right principle to look at any restructuring of any banking sector, and it has been adhered on many occasions within the European Union over the last 5 years’ time, is to split and differentiate between very healthy banking institutions and unhealthy banking institutions. VTB Cyprus is a largest bank in Cyprus, we have been very profitable, and according to our financial statements, we are employing Cypriot people, we are paying taxes, we are a very law-abiding institution in Cyprus. And we do not feel or see a reason why we should be sort of punished in any way, in any shape or form.

HOST 1: Yuri, what is this business now worth?

YURI SOLOVIEV: What do you mean «business worth»?

HOST 1: What is the business in Cyprus now worth to you? Can you put a value on that business? You say you are being penalized.

YURI SOLOVIEV: I don’t want to be speculating about value of a certain thing, because it’s not being sold or bought, and it’s an integral part of VTB Group. What I can say is that last year, according to our financial statements, the bank produced a hundred million euros or in excess of a hundred million euros worth of net profit, you can take a ratio if you want to apply it…

HOST 1: You are a very well- informed person in the banking circles of Russia. Is it your understanding that Russian depositors have been able to remove money from Cyprus despite the inability for the banks to open there?

YURI SOLOVIEV: No, my understanding is, for instance, taking our institution, we are law-abiding by spirit and by the letter of the law, we did not allow anybody to do anything, and we’ll be waiting for the Central Bank’s further steps in opening up the economy, opening up the banking sector.

HOST 1: Have you got any understanding, any communication with Cyprus to tell you how long you expect these capital controls to remain in place?

YURI SOLOVIEV: No, we do not have any firm understanding of this. We are obviously trying to keep up a dialog with the regulator, with the government, and trying to give our intellectual sort of advice, how we would be looking into this, because we’ve gone through many restructurings in many different countries. However, no, we do not have any firm indication at how long it will take.

HOST 2: Yuri, there was a report today that you may increase your dividend payout around 15% of net income for 2012? Can you confirm that’s the case? Can you confirm there are discussions around that?

YURI SOLOVIEV: I am not sure at this point in time what we officially published. We are looking generally to increase our dividend payouts, because we do believe we can afford this and reward our loyal shareholders, so this is definitely an attempt. With regard to specific numbers, I would refer to the publicly made announcement by the bank.

HOST 2: There is a big deal between VTB and Tele2. The billionaire Mikhail Fridman’s Alfa-Group is now offering a higher offer. Is your agreement between VTB and Tele2 legally binding?

YURI SOLOVIEV: It is a legally binding agreement, the transaction has been completed and properly signed, and at this point in time I don’t think there is any, sort of, open discussion to review that particular transaction. The deal is done.

HOST 2: The deal is done. Yuri, great to have you on the phone, we’ll have to get you in the studio next time you are in London. Yuri Soloviev from VTB.

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