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President of Russia Vladimir Putin: Mr Kostin, we will of course discuss the overall activities of the bank, but I would like to begin with the results of your work with the public.

VTB Bank Chairman and CEO Andrei Kostin: Mr President, I believe it would be correct to say that the banking sector in general and VTB Group in particular have overcome a difficult stage in our development and have now entered the stage of stable work, which is reflected in the public’s growing trust in the banking sector.

I would like to quote only one figure: since the beginning of this year, the amount of savings held by the public at our group of banks has grown by 131 billion rubles. In comparison, last year we did not have such a growth; we did not have any growth at all. This means that people are again taking their money to the banks, which is a demonstration of their trust. I believe this is of great importance for the banks, and the banking sector is reacting to it.

Vladimir Putin: In a sense, they are bringing back what they earlier removed from their accounts. Nevertheless, the banks should offer the people new, modern and efficient products.

Andrei Kostin: Of course, we are working on it, particularly since competition is very high within the banking sector: there are both foreign and Russian banks operating here.

As for loans to the public, there was a significant drop in the first quarter, which was brought about by the higher interest rates. Now, however, we again see a positive trend. If we take such a popular product as, say, cash loans, in April the amount was double that of March, though the overall level is lower than last year.

Vladimir Putin: What about mortgages?

Andrei Kostin: Our mortgages are stable now, but they started developing due to state support – thank you for putting forth this initiative in March. The programme is developing rapidly; we have already issued 3,600 loans worth a total 6 billion rubles. The total number of mortgage applications exceeds 23,000 worth about 47 billion rubles in total.

We are also further developing military mortgages. In the past two and a half years, we have issued 20,000 loans to servicemen worth over 43 billion rubles.

We generally practice various mortgage arrangements. For instance, together with Saturn Research and Production Association, we introduced a special mortgage programme for young professionals to make sure they stay on their jobs. We offer a long-term loan at a low rate of 11 percent, so that young professionals under 35 could establish themselves and work in the defence industry. We now intend to spread this practice.

Vladimir Putin: Good.

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