Vnesheconombank Chairman Vladimir Dmitriev’s Interview to the TV Channel Russia 24

The TV Channel Russia 24
17.09.2010, 18:32

HOST: Good evening! Our guest today is Vnesheconombank Chairman Vladimir Dmitriev. Good evening Vladimir Alexandrovich!

Vladimir DMITRIEV, Vnesheconombank Chairman: Good evening!

HOST: This Forum is not the first for you. Vnesheconombank invests actively in this sort of events. What’s new, what contracts have you concluded this year?

Vladimir DMITRIEV: You are right, the Kuban International Economic Forum, which is going to mark its anniversary next year, gives us a unique chance to talk with our partners, sum up the results of cooperation and map out plans for the future. And this Forum isn’t an exception. We have signed a whole range of agreements including general ones on cooperation as well as specific ones concerning specific projects. To my mind, the Forum, at least its first full day, proved to be successful. I like the first event organized by Sberbank and devoted to providing support for small and medium-sized enterprises. And of course, today’s plenary meeting was memorable and important as it confirmed that the Forum is a Prime-Minister level gathering. Today, the Prime Minister described the current state of the Russian economy, gave us reasons for optimism, and the most important thing was that answering a ten-year-old question about what kind of Russia he would like to see he said that he would like to see a happy Russia. And I think that in this respect, we are all happy about Russia’s development dynamics in the past ten years. This forum is in essence an international event. There are a lot of foreign guests, including our partners, Vnesheconombank’s partners. They participate in plenary meetings and we hold talks with them on the sidelines of the Forum.

HOST: Vladimir Alexandrovich, you invest heavily, as I’ve already mentioned, in this region. I know that you you’ve signed several agreements today. Could you tell us a few words about them?

Vladimir DMITRIEV: As far as our involvement in the Krasnodar region and in the region as a whole is concerned, it’s worth mentioning the fact that yesterday a ceremony of opening of the Sochi International Airport was held in Sochi. It was Vnesheconombank that financed the construction and modernization of the Sochi Airport and it was our first project as part of Vnesheconombank’s participation in funding the construction of Olympic facilities. We discussed this line of our activity in the course of talks and it was also partially reflected in the agreements we have signed today. What is really important is Vnesheconombank’s increased cooperation with North-Caucasus republics. You know there is an order by both the President and the Prime Minister to establish a North-Caucasus Development Corporation. I think it will start operating in November. And today’s agreements on building the Arkhyz tourist cluster in the Karachaevo-Cherkessia, development of agro-industrial complex in Kabardino-Balkaria, supporting the construction materials manufacturing sector in Dagestan are witness to the fact that the region’s potential is pretty large. And I think that Vnesheconombank and other banks including those with state’s participation have all the chances of making large investments in the region thus improving the socio-economic situation here dramatically.

HOST: Vladimir Alexandrovich, what amounts of money do you mean? Do you mean tens of billions of rubles?

Vladimir DMITRIEV: If we mean a tourist recreational cluster in the Northern Caucasus, it includes almost all republics of the Northern Caucasus, it’s a matter of 450 billion rubles. The cluster is comprised of mountain ski resorts and infrastructure. It’s important that these projects are being implemented on the principles of public private partnership. The important thing is that the Investment Fund, special economic zones, private investors and, of course, Vnesheconombank participate in these projects. Vnesheconombank is glad that Sberbank of Russia would and not for the first time participate in these projects. So, the sums are pretty impressive. And if we mean Sochi, about 150 billion rubles are earmarked for Olympic facilities alone, with Vnesheconombank’s participation being 80 billion rubles. We’ve already started to fund 6 projects worth 15 billion rubles. And in general, comparable amounts of investments may be channeled to the republics of the North-Caucasus Federal District.

HOST: And now about another line of Vnesheconombank’s activity. In particular, you are actively supporting small and medium-sized enterprises. This issue has been also given much attention today. And it’s not a secret that there are some problems in this sector. What’s Vnesheconombank doing to support SMEs?

Vladimir DMITRIEV: We believe and today’s morning discussion confirms it that both Kuban and the North Caucasus are quite promising for developing small and medium-sized enterprises on a large scale, given Russian commercial banks’ and Vnesheconombank’s support. This, of course requires using the region’s potential to the full. The region is a breadbasket and a health center.

HOST: And a talent foundry.

Vladimir DMITRIEV:  If we mean a talent foundry, we should say that training specialists  is a very important task. We need specialists for hotel and tourist business, we also need them for sports clusters. They are also needed in the agriculture sector. Unfortunately, we have lost competence in some sectors and we have never had one in several others. Here I mean mountain ski resorts. So we have a lot of work to do in this respect. There are many major production facilities and commercial entities in the region. The main thing in supporting SMEs is not just establish them from scratch but to rely on the existing industrial and agricultural infrastructure. This is what we are supposed to do. And a large-scale program we have launched through the Russian Development Bank relies among other things on the potential of Kuban and the North Caucasus.

HOST: Vladimir Alexandrovich, I’d like to ask you a few questions not related to the Forum. What’s the situation with regard to the creation of a Postal Bank? Are there any changes in your position on this issue?

Vladimir DMITRIEV: Our position hasn’t changed at all. We are doing our best in this respect. On September 15, two candidate banks, namely Nomos Bank a Russian Standard Bank submitted financial plans updated in accordance with Vnesheconombank’s and Svyaz-Bank’s requirements as well as business-plans and business-models. We’ve got enough time to examine them thoroughly once more and if, required,  we are ready to hold talks on adjusting them. We are keeping to schedule and hope that we’ll start to rebrand Svyaz-Bank starting next year and a process of denationalizing the Post of Russia is to be also launched. Of course, an investor is also to be chosen and then  we’ll be able to get down to implementing this program.

HOST: One more question. Vnesheconombank extended credits to large Russian banks at the time of crisis. Many banks have already repaid them. But there are some problems here, for example with Rusal. How is the situation with Rusal developing and what is going to happen to the mining and smelting company’s blocking stake?

Vladimir DMITRIEV: You are quite right. During the crisis Vnesheconombank relied on the state’s support, specifically on the Central Bank’s support and used funds it received from the Central Bank to refinance major Russian borrowers’ foreign debts. We used a little more than 11 billion dollars to refinance the said debts. By now, all the credits except for one extended to Rusal had been repaid. This shows that borrowers are doing well financially and can either repay credits on their own or obtain long-term credits from commercial banks and this was the main goal of the Russian Government. At the time of the crisis, both our corporate partners and Russian banks except for Vnesheconombank supported by the state were in a critical situation and they didn’t any sources to refinance those foreign debts. At present, the situation in the banking system and borrowers’ financial standing allow them to refinance the said foreign debts on the terms that are not worse compared to those of Vnesheconombank’s credits. I wouldn’t describe the situation with Rusal as problematic. It’s going according to schedule.

HOST: It’s developing normally.

Vladimir DMITRIEV: The situation is developing normally. Rusal is ready to repay the debt by way of using Sberbank’s credit resources. We held talks both with Rusal and Sberbank on working out a refinancing model acceptable for all parties. A key element in this model and in the pattern of this transaction is that the mining and smelting company’s collateral is not to be alienated from the state under no circumstances. It goes without saying that if Rusal fulfils all its obligations under a new refinancing agreement on settling the debt ,an issue of Nornickel’s blocking stake will be removed from the agenda.

HOST: Thank you, Vladimir  Alexandrovich, thank you for finding time for us today. I’d like remind you that our guest was Vnesheconombank Chairman Vladimir Dmitriev

Vladimir DMITRIEV: Thank you.