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President of Russia Vladimir Putin: Mr Kostin, there are two questions I would like to discuss with you.

When I was visiting the regions hit by the floods, people told me about problems with repaying loans they had obtained from various financial institutions.

This concerns individuals and legal entities, businesspeople, above all small and medium-sized business, and agriculture sector businesses. They are finding it difficult or impossible to repay the loans, or even to repay the interest on these loans, and they asked for help to sort out this problem.

I wanted to discuss this issue with you first, seeing as your bank is active in the country’s regions.

Second, you wanted to tell me about your big infrastructure projects.

Let’s start with the first issue.

President and Chairman of The Board of Vtb Bank Andrei Kostin: Fine, Mr President.

We have approved new rules for all of the banks in our group, which includes VTB-24 and Bank of Moscow, concerning our work with people hit by the flooding in the Far East, and also small businesses.

These new rules introduce a 12-month moratorium on principle debt. They also bring down the interest rate to two thirds of the Central Bank refinancing rate, that is to say, 5.5% as things stand today. Finally, at the borrower’s request, the loan can be extended for up to a ten-year period.

We understand that people and businesses have ended up in a very difficult situation, and we will therefore monitor the situation and if necessary will take further steps to ensure that the debt burden remains at a bearable level. We understand the situation there at the moment.

Vladimir Putin: I ask you to be flexible in resolving these issues. Of course all financial institutions have rules and operating principles, but the banks have nothing to gain by driving people or businesses into a corner – they still won’t end up getting anything back from them that way.

It’s better to support them, help them out, give them the conditions they need so that the creditors can be happy with what the borrowers do once they have managed to get the situation back under control.

Andrei Kostin: Mr President, this is exactly the approach we are taking in this work.

As far as infrastructure projects go, we realise that one of the big priorities now is to develop infrastructure, and the bank is taking an active part in this work.

In particular, we are one of the main investors in building the new terminal at Pulkovo Airport [in St Petersburg]. You laid the first capsule there at the end of November 2010, three years ago, and we made the commitment to have the airport ready in exactly three years from then.

I want to inform you that the terminal will be ready for use exactly as planned, and I hope that if you have the chance and will be in St Petersburg at that time, you will take part in the opening ceremony.

The airport is designed to handle 17 million passengers. Last year, Pulkovo had passenger traffic of around 12.5 million people, so there is still reserve capacity. But the number of people flying to St Petersburg is growing fast, and so I think this reserve capacity will soon find itself in use.

Second, this year we became an investor in the project to build the Western Rapid Diameter’s central section, one of the most complicated sections of this project.

We committed ourselves to a three-year deadline for this project and plan to have the section ready for operation in 2016. This will be a big help in relieving traffic congestion on St Petersburg’s main roads.

We have a number of other ideas too. We have already won a tender for building a bridge across the Kama River in Izhevsk. This is a big project worth almost 14 billion rubles [more than $430 million]. We are a co-investor and a creditor in this project.

We will take part in other tenders too that are held as part of public-private partnership, in particular, infrastructure projects on the Lena River and construction of the final stretch of the Moscow-St Petersburg Motorway.

We will take part in these tenders and we hope to win them. We have a whole package of projects and a good team, and we hope that the bank will continue taking an active part in this work.

Vladimir Putin: Good.

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