Russia's VTB plans to
slim down in Europe, keep London as hub
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[February 27, 2017]
By Alexander Winning and Kira Zavyalova
(Reuters) - Russian bank VTB plans to cut costs by slimming down
its operations in the European Union to focus on Frankfurt while keeping
London as the base for its investment banking business, the bank's first
deputy president said.
The reorganization of VTB's European business would mean the three
banking licenses it has in Austria, France and Germany would be merged
into one held by its German bank, allowing VTB to significantly cut
costs, Yuri Soloviev told Reuters.
Soloviev said VTB was not looking to leave Britain due to its decision
last year to leave the European Union.
"London remains the international headquarters of our investment bank,
VTB Capital. At the moment we are definitely not considering any
reduction of our business or an exit," Soloviev said in an interview in
"If you take any Russian company on a roadshow, then absolutely the
first center where you go remains London."
VTB's global ambitions took a hit when it was included in Western
economic sanctions over the Ukraine conflict, while an economic crisis
in Russia from 2014 dented profits.
Sources have told Reuters that VTB cut London staff in the wake of the
sanctions as deal volumes fell off sharply and many of its Russian
corporate clients were shut out of international capital markets.
"Over the past year or two we have re-evaluated our presence in Europe,"
"We have reformatted our business model. Our main focus now is following
Russian capital. We have developed a specialization in several
countries, especially ones where global banks have pulled back. That's
some countries in Eastern Europe, Bulgaria, Serbia, former Yugoslavia in
Among VTB Capital's recent deals in Eastern Europe it sold Bulgaria's
leading telecoms operator Vivacom last year. In 2012 it placed a $750
million Eurobond for Serbia.
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The logo of VTB Group is seen through a window of Imperia Tower on a
facade of the Federatsiya (Federation) Tower at the Moscow
International Business Center also known as "Moskva-City", in
Moscow, Russia, August 5, 2015. REUTERS/Maxim Zmeyev/File Photo
Soloviev said VTB was in discussions with the European Central Bank over
a pan-European banking license.
Soloviev said VTB saw opportunities to expand its business in India
after it helped finance the deal for a consortium led by Russian oil
major Rosneft to buy India's Essar Oil.
"After the Essar transaction we have become one of the most well-known
brands on the local market," he said. "We have found a very interesting
niche on the level of mezzanine capital and trade cooperation between
Russia and India."
VTB currently has deals in India in technology, media and telecoms (TMT)
and is monitoring the real estate and metallurgy sectors, Soloviev said.
In Russia, Soloviev said VTB was capitalizing on a pickup in investor
appetite for Russian debt by organizing one or two corporate Eurobond
deals a week.
"Our companies are lining up, making the most of the moment when spreads
are tight," he said.
Soloviev said VTB was on track to hit its ambitious target of doubling
net profit in 2017 and that the bank did not need any additional capital
(Writing by Alexander Winning; Editing by Katya Golubkova and Elaine
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