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13 Nov 2008 13:59
Supervisory Board approves Management Action Plan
Moscow, November 13, 2008 - The Supervisory Board of VTB Bank yesterday approved a Management Action Plan to ensure the bank is effectively positioned to weather the current unprecedented market conditions.
Given the bank's pivotal role within the Russian economy as the largest corporate lender, VTB has been working actively with the support of the Government to build long-term strategic partnerships with key corporates throughout the economy. VTB has been actively channeling funding to businesses in the construction, retail and agricultural and food production, sectors identified by the Government as priority. The bank has also been actively supporting the liquidity of the banking system as a whole, through a series of measures targeting smaller regional banks deemed essential to the smooth functioning of the banking system as a whole.
The bank believes that these actions at a time of severe liquidity shortages in the interbank and corporate markets will pay long-term dividends in terms of stronger customer relationships and business flows when more normal times return.
Since early September when the Government announced its package of measures, VTB has extended credit to Russian companies to the tune of 377 billion roubles. In the year to end of October 2008, under IFRS, corporate loans were RUR667 billion against RUR363 billion gained over the similar period in 2007. VTB Group retail loan portfolio has grown, under IFRS, over the ten months of 2008 by RUR183 billion, or a 97% increase.
The bank is taking steps to cut costs including postponing the planned head office move scheduled for 2010 and a moratorium on new hiring. The bank will also focus even more rigorously on risk management, and risk control through more centralized monitoring of risk and the establishment of a specialized work-out unit.
The Supervisory Board discussed proposals of VTB Management for further measures to support stability in the Russian financial market and to assist the recovery of the national banking system. These will be presented to the Government and the Bank of Russia shortly.
With respect to geographic expansion, the bank continues to prioritize investment in high growth CIS countries, which may amount to 6-7% of assets by 2010. This includes Kazakhstan and Azerbaijan, planned investments in other lower growth countries in the region will be shelved at least until conditions stabilize.
The Board has also today approved two changes in the Management Board. Andrei Puchkov, a member of the Management Board and Head of Legal Department, was appointed as Deputy Chairman of the Management Board, and Valery Lukyanenko, Corporate Client Division was elected to the Management Board. Both appointments are subject to approval by the Central Bank of Russia and are until June 9, 2012.
VTB Bank President and Management Board Chairman Andrei Kostin said: "The steps we are taking, in addition to the role we are playing at this crucial time in supporting Government actions to assist the economy, will enhance our competitive position while ensuring we remain a strong and well funded bank that continues to deliver value to shareholders."
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