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Andrey Kostin: “We would like to have access to the Chinese stock market and debt market”



HOST: And today also marks the final day of the 2015 BOAO Forum for Asia Annual Conference. Despite some interesting discussion on artificial intelligence between Bill Gates, Elon Musk and Robin Lee from China’s Baidu, infrastructure investment in China still dominates conversations about multinational companies and policymakers. Our reporter Xia Cheng spoke with Andrey Kostin, the Chairman and CEO of Russia’s second largest bank, VTB, on how Russia could capitalise on China’s outbound infrastructure investment.

ANDREY KOSTIN: Russia would be participating in both the bank and the Silk Road project, which is very important for Russia, as I said, because Russia has a very special and a very ambitious plan to develop the infrastructure of the Russian Far East and Siberia.

XIA CHENG: So is the Chinese market particularly important for Russia because you are under Western sanctions?

ANDREY KOSTIN: Yes. But we also know very little about each other. When we are talking about the financial markets, Russian business traditionally went to the West, to the London Stock Exchange, to the New York Stock Exchange. Of course, we would like to have access to the Chinese stock market and debt market. As we all know, today foreigners don’t have access to the Shanghai Stock Exchange, for example, but we are very interested in this. We are discussing it both with the government, we had a discussion with the Minister of Finance this afternoon, and also with the banks, because for us it is an important source of funding.

XIA CHENG: Russian banks were hit by a lot of economic problems in Russia last year, and your profit was pretty much wiped out?

ANDREY KOSTIN: Russian banks are not as bad as many probably think. For us the major problem comes from the high interest rate, but the interest rate was cut by 3% over the last couple of months, and I think this trend will continue. Russian rouble has now stabilised, and we very much believe that if the Central Bank brings down the interest rate from today’s 14% to 10%, within the next 3–4 months, recently the government allocated 1 trn rubles, which is USD 16 bn to support the capital base of the Russian banking sector, it’s quite adequate for Russian banks.

XIA CHENG: So, is Russia’s economy hitting the bottom in 2015?

ANDREY KOSTIN: Yes, we believe so. We think we will have negative growth this year, but starting from 2016 we expect positive growth of 2–3%, so as I said, things are not as bad as some may think. Of course, the oil price is important for us, but it also stabilised. We do not expect that it will quickly return to $100 or thereabouts, but I think it will stabilise at the level of $60, and that will be sufficient for the Russian budget and for the Russian economy.


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