Russian Banks Have To Get Recapitalized As Losses Linger – VTB CEO – Cryptovibes.com – Daily Cryptocurrency and FX News
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CEO of the second-largest lender VTB (VTBR.MM), Andrey Kostin has told the TASS news agency that Russia’s banks will need a wider recapitalization, with the scale of it to be determined later this year once there is a clearer picture of the losses the sector faces.
Kostin said on April 5:
“I don’t know yet where the capital boost will come from but it will come for sure. Not only for VTB but the wider banking sector, I think.”
He expected the financial sector to post losses in 2022. Following Russia’s invasion of Ukraine in February, western sanctions have cut Moscow off from nearly half of its $640 billion in gold and foreign exchange reserves and the global financial system.
Massive pressure has also come in as international payment cards Visa and MasterCard stopped servicing Russian accounts abroad, and several of Russia’s biggest banks, VTB included, were cut off from the SWIFT global banking messaging system.
The central bank has opted for removing banking licenses over providing cash injections since major private banking bailouts in 2017 were worth over 2 trillion roubles.
To boost the bank’s capital, in a non-cash form of support, VTB was previously allowed to pay smaller dividends on preferred shares held by the state.
According to the Center for Macroeconomic Analysis and Short-term Forecasting, Russia’s banks may need as much as 2.2 trillion roubles in state support, of which the bulk of 1.5 trillion, would be needed for top lenders, private firms included.
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