1990-1994 Establishment and recognition
Vneshtorgbank (VTB; Foreign Trade Bank) was established in October 1990 by the RFSFR State Bank and Ministry of Finance
Vneshtorgbank (VTB; Foreign Trade Bank) was established in October 1990 by the RFSFR State Bank and Ministry of Finance to service Russia’s foreign economic transactions and promote the country ’s integration into the global economy. The Bank’s head office was opened in a beautiful mansion built on Kuznetsky Most Street in the early 20th century by the famous Moscow architect of Swedish descent Adolf Erikhson.
On 2 January 1991, VTB Bank was issued General Licence No. 1000, granting it the right to conduct all types of banking transactions in Russian roubles and foreign currencies.
In 1994 VTB was ranked 425th on the list of the Top 1000 World Banks compiled by The Banker magazine.
1995-1998 Quality and reliability
In 1997, the government voted to transform VTB from a closed into an open joint stock company
In 1997, the government voted to transform VTB from a closed into an open joint stock company. The Central Bank of Russia
became its biggest shareholder with a 96.8% stake.
1999-2001 Development and growth
The Bank’s charter capital grew to RUB 42.1 billion and the Central Bank’s interest increased to 99.9%
The Bank’s charter capital grew to RUB 42.1 billion and the Central Bank’s interest increased to 99.9%. VTB was the most highly capitalised lending institution in Russia, the CIS and Central and Eastern Europe, and rose to
222nd place in terms of capital on The Banker’s list of Top 1000 World Banks.
2002-2006 Breakthrough strategy
In 2002, the Russian government bought the Central Bank’s stake in VTB and became the bank’s largest shareholder
In 2002, the Russian government bought the Central Bank’s stake in VTB and became the bank’s largest shareholder.
A new team of managers led by Andrey Kostin, the current President and Chairman of the Management Board of VTB Bank, came to the bank in 2002. Their strategic goal was to turn VTB into Russia’s leading banking institution across all key segments including retail and investment banking.
In 2004, VTB took over Guta Bank, which it turned into the country’s most successful retail bank, VTB24, in 2005.
The acquisition of St Petersburg-based Promstroybank (PSB) in 2005 helped VTB to strengthen its standing in northwest Russia and its leading position in the Russian banking sector as a whole.
2006-2008 The energy of success: A new outlook
In 2007, VTB held an initial public offering, marking the largest banking IPO in Europe and second largest IPO in the world at that point of time.
In 2007, VTB became the first Russian bank to hold an initial public offering. The IPO, at the time the largest anywhere in the global banking sector, helped VTB to raise US$ 8 billion. Demand for VTB’s GDRs on the London Stock Exchange was nine times higher than the offer, attracting interest from nearly all the leading US and European investment funds. In Russia, more than 120,000 people bought VTB shares.
As a public company, VTB Bank policy became much more transparent. Independent directors were brought onto the board. An audit committee was established at the VTB Supervisory Council, and the Investor Relations Division was added to the bank’s structure. In 2007, Standard & Poor’s declared VTB one of the most transparent Russian banks.
In 2008, VTB became the first Russian bank to receive a banking licence in China and India, and opened branches there.
In the same year, the group’s investment business was consolidated as VTB Capital in Russia and VTB Capital PLC (formerly VTB Europe) outside Russia.
2009 Negotiating obstacles, moving forward
Faced with the global financial crisis, VTB Group focused on maintaining sustainable performance and key indicators
Faced with the global financial crisis, VTB Group focused on maintaining sustainable performance and key indicators. New market conditions called for new instruments, such as adjusted lending policies, improved risk management and intensifying efforts to recover troubled loans. At the same time, the group expanded its funding sources, strengthened its capital base and reduced costs.
VTB Group not only weathered the crisis but also made a breakthrough in its development. It exceeded most of its strategic targets set for the end of 2009, including by 4% in assets, 3% in the loan portfolio volume, 21% in customer metrics and 10% in fixed incomes (interest, fees and commissions).
2010-2013 Setting records
VTB has continued its development in the post-crisis era, achieving record results in 2010–2013
VTB has continued its development in the post-crisis era, achieving record results in 2010–2013. In 2010, VTB’s net profit amounted to RUB 54.8 billion, rose to RUB 90.5 billion in 2011, totalled RUB 90.6 billion in 2012, and reached RUB 100.5 billion in 2013. In 2010–2013, the Group grew its assets 140% to RUB 8.8 trillion (USD 268 bn), its loan portfolio expanded 150% to RUB 6.6 trillion (USD usd 201 bn), and deposits surged 170% to RUB 4.3 trillion (USD 131 bn). This growth was supported by the successful acquisition and integration of TransCreditBank (2010) and the Bank of Moscow (2011). The Group further strengthened its retail business with the launch of Leto Bank, its retail lending arm, recognised as one of the most successful new Russian brands in 2013.
n February 2011, the Russian government divested a 10% stake in VTB, making the Group a pioneer in privatisation. The offering focused on long-term, serious investors. In May 2013, VTB held a secondary public offering, attracting a number of major international investors. As a result, the state-owned stake in VTB declined from 85.5% to 60.93%.
2014-2016 Quality Growth Strategy
Despite the difficult macroeconomic situation, VTB Group has met its strategy goals for 2014−2016
Despite the difficult macroeconomic situation, VTB Group has met its strategy goals for 2014−2016, including qualitative business growth and maintaining its leading position in the Russian banking market, improving efficiency and sustainable costs, and further developing the management model.
VTB Group has surpassed its goals for working with corporate clients; and at the same time, the Group has substantially strengthened its position in the retail banking market. VTB Group’s corporate loan portfolio has been growing ahead of the market, increasing market share to 16%, while its share of funds raised from corporate clients has risen significantly to 23%.
The Group’s share of the consumer lending market and funds raised from corporate clients accounts grew to 20% and 11% respectively. This is a direct result of successfully increasing the share of retail business in the Group’s assets and revenues.
In 2014−2016, VTB Group implemented a series of major strategic projects aimed at strengthening market positions and diversifying business, as well as improving internal efficiency and management quality:
— The Mid-Corporate Banking Global Business Line was established, which strengthened the Group’s position with Russian medium-sized companies and regional businesses.
— The integration of the Bank of Moscow — a major merger of banks in the Russian market — enabled the group to achieve significant cost savings, and improved the quality of management.
— The joint Pochta Bank project with Russian Post gave VTB Group access to Russian Post’s nationwide infrastructure, enabling the Group to build a larger-scale retail business and significantly strengthen its position servicing the mass retail segment.
VTB Group Strategy for 2017−2019
VTB Group’s 2017−2019 strategy was approved by the Supervisory Council in December 2016, and set out the following key goals for the period
VTB Group’s 2017−2019 strategy was approved by the Supervisory Council in December 2016, and set out the following key goals for the period:
— To increase the Group’s profit to more than RUB 200 billion and promote its leading position in the Russian banking market;
— Integrate and optimise the Group’s structure by building a single universal bank;
— Conduct a large-scale technology modernisation.
Optimising the Group’s structure and cost of funding is one goal in the 2016−2019 strategy. As part of realising the goal, it is essential that VTB clients’ funds grow faster, dependence on the Bank of Russia’s borrowed funds decrease, and the share of foreign exchange resources shrink. The Group is also aiming to significantly increase the corporate client portfolio.
As part of its continued development, VTB Group aims to further increase the volume of corporate lending operations, retaining its leading position in the market, whilst continuing to strengthen its position in the consumer lending market.
The merger of VTB 24 and VTB Bank will make a significant contribution to enhancing the Group’s performance. The completion of the merger will improve the management and the coordination of business lines, and will create a single team formed of the best representatives of both banks.
Digital transformation of the Group’s business and processes will provide additional sources of revenue, bringing the remote customer service system to a new level, and improving internal efficiency and productivity.