VTBthe second largest bank in Russia and one of the first to be excluded from the global payment system Swift, announced on Wednesday a loss of $7.7 billion in 2022 due to sanctions derived from the Russian offensive in Ukraine.
“In 2022, the VTB group faced unprecedented difficulties and challenges (…) We became the first target of the maximum possible sanctions, which caused considerable losses”, lamented Dmitri Pianov, financial director of VTB, quoted in a group statement.
VTB announced that it suffered a loss of 612.6 billion rubles, the equivalent of 7.7 billion dollars at current exchange rates, after having achieved a net profit of 327.4 billion rubles in 2021.
International sanctions against the Russian banking sector hit VTB hard, of which the Russian state is the majority shareholderand which is especially present in foreign markets.
VTB detailed the impact of “the unprecedented outflow of foreign exchange liquidity”, the losses due to the divestitures of subsidiaries, and the rise in interest rates of the Russian central bank.
In March 2022, a few days after the start of the Russian military intervention in Ukraine, the European Union excluded VTB from the Swift international payment system.
Its president, Andréi Kostin, in office since 2002, was also sanctioned individually in the United Kingdom and the United States.
In 2020, VTB had 15 million customers in Russia and employed close to 80,000 people.
Russia seeks to cover its debt
UK intelligence services have reported that Russia could seek to issue foreign debt to “plug holes” in the country’s finances facing “a long war in Ukraine”, after the Russian Prime Minister, Mikhail Mishustin, unveiled a plan in this regard.
“Russian authorities probably view the issuance of foreign debt as a way to plug holes in Russia’s finances while they plan for a long war in Ukraine. However, it remains unclear whether Russia will be successful in applying these measures,” they said.
Thus, they have recalled that Mishustin confirmed on March 28 that Moscow wasto “developing” a plan to “issue part of Russia’s sovereign debt in foreign currencies” and has explained that “it is almost certainly an indication that Russia anticipates external financial support from countries it considers ‘friendly’.”
“Once this is complete, investors from other countries will be able to buy Russian sovereign debt and finance part of Russia’s future budget deficits. These investors would be indirectly financing the Russian invasion of Ukraine,” they stated, according to a series of messages published by the British Ministry of Defense through their account on the Twitter social network.
In this sense, they have stressed that “in recent months, Russian banks have been the main entities that bought state debt” and added that “however, it is unlikely that they will have the capacity to fully finance the anticipated deficits of future Budgets ”.
(With information from AFP and Europa Press)
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Source-www.infobae.com