Russian state bank VTB blames all of 2022 losses on sanctions -CEO

MOSCOW – Andrei Kostin, CEO of Russia’ No. 2 bank VTB on Tuesday blamed sanctions for the lender’s entire 2022 losses, a rare acknowledgement that Western efforts to punish Moscow over the Ukraine conflict have crippled parts of Russia’s financial sector.

The West blocked several major Russian banks’ access to the international SWIFT payments system soon after Moscow sent tens of thousands of troops into Ukraine on Feb. 24 last year, with dominant lenders Sberbank and VTB forced to shutter operations across much of Europe.

The sanctions hammer fell for VTB sooner than most domestic rivals and, being heavily exposed to international markets and with more than 20 percent of its loan portfolio in foreign currency, the bank was one of more than 100 loss-making lenders as the sector’s profits slumped around 90 percent in 2022.

Kostin, in an interview with state television channel Rossiya 24, said the bank had managed to grow its retail and corporate loan portfolios, but that sanctions accounted for all the lender’s losses.

“The main thing on which we incurred losses is that from Feb. 24 to March 10, before decisions were made about restrictions on issuing funds in foreign currency to the population, $26 billion was withdrawn from our accounts,” Kostin said.

Capital controls introduced in February and March last year included a ban on buying cash dollars and euros as depositors hurriedly withdrew funds and Moscow sought to wrestle back some control on the FX market.

VTB was forced to buy FX on the open market when the rouble had weakened sharply to more than 100 against the dollar, Kostin said. On Tuesday the rouble was trading at around 71 to the dollar.