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President of Russia Vladimir Putin: Mr Kostin, I would like to thank you again for organising the Russia Calling! forum.

I believe this is important, rewarding and interesting not only for us, although it does give us insight into the mood of our partners both in Russia and abroad. But for them, too, I hope, it is also informative and gives them an idea about where we are now, and our assessments of the current developments, and, most importantly, it gives them an idea of how we are going to proceed, what priorities we will be guided by and what plans we are making for economic development.

I know that VTB has marked its 30th anniversary this month. Over this time, this conglomerate has done a tremendous job, has evolved to become one of the largest financial institutions in Russia along with Sberbank. It has been working most effectively, under your leadership, for years, and you have grown from a diplomat to a major financial executive, and head of one of our largest banking institutions. Once again, I congratulate you and your entire team on this anniversary. All the best to you.

We live in difficult times. I know that VTB has contributed to supporting the national economy and thus, Russian citizens, and has shouldered a certain burden doing so. I spoke about this here at the forum. In any case, I must say I appreciate the postponement of loan payments, and, as they say, the bank made a right shift on some items, and I would like to thank you for that specifically.

So how is the bank faring in this period? What is your assessment of the current state of affairs?

President and Chairman of the Management Board of VTB Bank Andrei Kostin: Mr President, what you said today has indeed been confirmed; the Russian economy in general and the banking sector in particular have come through this period with a few scratches.

You were correct when you said VTB bank has provided assistance to Russian companies and citizens. We have actually been working on two tracks: the first is the restructuring of existing loans. We have actually restructured about 1.6 trillion rubles worth of loans – loans to Russian companies – allowing them to temporarily free up enough funds to make it through this difficult period.

However, the emphasis was on government programmes for small and medium-sized businesses. The Two Percent programme, which focused on maintaining employment, was particularly successful, because the companies that maintained their employment levels and did not fire their employees were allowed to keep the money. Another programme, also quite popular with companies, had the same goal. It was about interest-free loans that were used to pay salaries.

Thus, VTB Bank alone provided loans to 26,000 companies worth over 105 billion rubles, which tided these companies over through this period with minimal losses.

Similar efforts were made with regard to our individual clients. We have restructured approximately 370,000 loans worth over 300 billion rubles. This, of course, also came as significant support. Interestingly, these “vacations” are now coming to an end, and about 90 percent of our clients who are returning to normal life after their “holiday” are servicing this loan. This means that their situation allows them to do so. We are quite lenient about this and even include in the mortgage loan agreements an option where if a borrower runs into any difficulty, not necessarily the pandemic, but maybe job loss or some kind of a family situation, this borrower is entitled to a “holiday.” This is an innovation that we introduced in the wake of the pandemic, because the overwhelming majority of our borrowers are honest people, and they are willing to make good on the loan, but occasionally circumstances prevent them from doing so.

The 6.5 percent APR mortgage loans, which you came up with, and which has been effectively introduced, are of special interest. Over 40,000 families obtained this mortgage. I must say that the banks have gone even further and VTB Bank issues mortgages at 6.1 percent APR, which is slightly below the plan.

A special mortgage loan programme for families with two or more children continues unabated. We have issued about 26,000 such loans. Of course, this significantly helped homeowners and our construction industry. We see that companies continue to take out loans, which means they are interested in expanding their respective businesses.

We believe that this year the loan portfolio growth rates for corporate clients could amount to about 15 percent, and about 20 percent for small businesses. This means that the economy is doing quite well during the crisis, although we realise that the fourth quarter will be difficult, because the disease… probably not yet the second wave, but we see an increase in incidence around the world.

Everyone is aware of the measures that are being taken in Western Europe today. We are not taking such measures, which, I think, is the right thing to do, because it allows businesses to breathe.

Once again, I would like to tell you that I assess the measures that the Government has taken under your leadership as absolutely appropriate, and it is good that they are targeted. They helped the industries and the companies that needed them most, and they allowed us to get through this period unscathed.

Interestingly, despite these developments, trust in the banking sector is growing, not weakening, which we know from the fact that individual deposits in banks are growing. Individual client deposits in our bank have increased by about 15 percent this year to a total of 6 trillion.

In addition, clients with higher than average incomes have begun to invest in market instruments. This is normal and typical of any economy. Overall, the funds are flowing in, which means that people continue to trust the banks and work with them. This, of course, is good news.

Therefore, I think the banking sector will have a good year overall, including VTB Bank. We will have lower than planned revenue, but we will have it. We have created proper reserves and a foothold in order to reach the target indicators in terms of revenue and otherwise next year.

So, I think, in general, it was a good year for us.

Vladimir Putin: Mr Kostin, what about the bank's participation in infrastructure projects?

Andrei Kostin: Mr President, you know, we are interested in this line of business, and we have been pursuing it for a long time now. We have outlined a number of important projects and are already working on them. We will be financing the construction of a toll road interchange in St Petersburg, which will connect Vitebskoye Motorway and the Western High-Speed Diametre. This is a big project. We plan to finish it in 2024. This project will cost approximately 30 billion rubles. One third of this amount will be provided by VTB Bank.

In addition, we have now reached an agreement with the St Petersburg government that we will participate directly in and help financially to expand the metro, which needs it. We have also signed an important agreement with St Petersburg, Leningrad Region, and Inter RAO to create an integrated waste management system as it, too, needs a major upgrade and innovative technology. We are prepared to invest in this project.

We are also using our experience with airport projects, in particular, Pulkovo. By the end of next year, we plan to complete the construction of a new airport in Gelendzhik so that when the pandemic is over and the vacationers go to Gelendzhik in 2022, they will already be using a brand new, modern and beautiful airport.

Vladimir Putin: Good. Thank you.

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