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Russia Today
16 hours ago
- Business
- Russia Today
Western use of interest from Russia's frozen assets is theft – top banker to RT
The use of the interest generated by Russian assets frozen in the West amounts to theft, Andrey Kostin, the CEO of major Russian lender VTB, told RT on Saturday on the sidelines of the St. Petersburg International Economic Forum. Kostin condemned the actions of the West, the EU in particular, in regard to Russian assets as 'dangerous' games that could eventually be used by others against them. Western countries froze an estimated $300 billion worth of Russian sovereign funds following the escalation of the Ukraine conflict in February 2022. Some $213 billion of the assets are held by the Belgium-based settlement house Euroclear. 'It is a very dangerous thing to play such games. You start against one – tomorrow someone will use it against you,' Kostin warned. The use of proceeds from the assets, which have been repeatedly funneled for procurement of military aid for Ukraine, is grossly illegal and amounts to theft, Kostin noted. While various parties in the West have repeatedly mulled the possibility of seizing the assets themselves, they have failed to find a legal mechanism to do so because there is none, he added. 'This is theft. They are using interest now, but interest is the same money of the owner as the principal debt,' he stressed. Moscow has repeatedly condemned the freezing of its assets and has hinted at possible retaliatory measures against Western investments and property in Russia. Last October, Finance Minister Anton Siluanov warned that Moscow would retaliate in kind and start using the interest generated by the assets of 'unfriendly' countries and organizations held in Russia for its own needs. Kostin has long been skeptical about the prospects of Russia ever seeing its frozen assets again. Late last year, he suggested that the funds will never be returned under the pretext of Ukraine's purported 'reconstruction.' 'In the West, they say, let's pay for the reconstruction of Ukraine from the reserves. And they will draw up such a bill that even the reserves will not be enough,' Kostin said at the time.
Reuters
30-01-2025
- Business
- Reuters
Russian banks reap record profits in 2024, helped by high rates and loan growth
MOSCOW, Jan 30 (Reuters) - Russian banks made record annual profits of 4 trillion roubles ($40.7 billion) in 2024, the central bank said on Thursday, as Russia's financial sector continued to rebound from sanctions, riding a wave of high interest rates and solid loan growth. The central bank's high key rate, now at 21%, has boosted banks' net interest margins, but lending growth is starting to slow as soaring borrowing costs deter some companies from seeking financing for development projects, preferring to hold funds on deposit instead. The central bank has already warned that banks' profits will slip in 2025 as credit risks grow and margins are squeezed. German Gref, CEO of dominant lender Sberbank ( opens new tab, has called high interest rates a "colossal challenge" for businesses and banks, while Andrey Kostin, head of No. 2 bank VTB ( opens new tab said stricter regulation would also eat into banks' profits. Growth in corporate, consumer and mortgage lending all slowed in 2024, the central bank said in a report. The slowdown was most noticeable in mortgage lending, where growth fell to 12.4% last year from a record 34.5% in 2023. Mortgage issuance, at 4.9 trillion roubles, was almost 40% lower than the year before. Corporate loan growth of 17.9% in 2024 was tempered by a 4.1% increase in the volume of non-performing loans (NPL), though the share of NPLs dropped to 3.8% due to portfolio growth. A leading think tank advising the government said this week that Russia could face a wave of corporate bankruptcies this year as the share of businesses with risky debt levels doubled in 2024. Many large companies have complained about high interest rates raising their borrowing costs. Russia's largest mobile operator, MTS, in November blamed an 88.8% drop in third-quarter net profit on increased interest expenses, while state-owned monopoly Russian Railways is facing a $4 billion rise in interest payment costs this year. "Companies in most industries are still quite profitable, which allows them to service loans even at current rates," the bank said. "However, difficulties may arise for some companies with a high debt burden." ($1 = 98.3000 roubles)
