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

TV Channel Russia 24
INTERVIEW,
28.01.2012, 22:32

HOST: Vnesheconombank’s loan portfolio is to increase to 850-900 billion rubles by 2016. Vnesheconombank Chairman Vladimir Dmitriev told our TV channel about it. He also told us about the state corporation’s plans for a shorter term and difficulties in raising foreign investments for Russia.

Interview

CORR.: Good evening Vladimir Alexandrovich. Thank you for agreeing to give an interview. My first question is of course about VEB’s activity. A couple of years ago they talked about VEB as an instrument for overcoming the crisis and now VEB is increasingly viewed as a Bank responsible for developing the Russian economy. How do you operate and invest in the current complicated conditions.

Vladimir DMITRIEV, Vnesheconombank Chairman: I’d like to highlight here two things: Vnesheconombank’s influence on the economy is determined not only by encouraging investments but to a greater extent by raising funds and distributing them through credit products in the interests of advancing investment activity in our country. VEB is doing a lot in this respect, our mid-term program up to 2016 provides for increasing our loan portfolio up to 850-900 million rubles. And VEB’s and its Group’s impact on the economy is to amount to about 2% of Gross Domestic Product. This is a significant figure. In its credit and investment policy the Bank focuses on supporting those sectors that are in line with the economic policy’s priorities: innovations, modernization, energy saving and new technologies.

CORR.: Is that true that you will simply be a borrower on capital markets largely abroad and then you will be distributing these funds among Russian borrowers or are you going to have a more intricate scheme?

Vladimir DMITRIEV: Not necessarily abroad. We have to take into account currency risks when conducting transactions. But if companies give high priority to manufacturing goods for exports, they prefer to have their funds in foreign currency.  We are sure to raise funds abroad and on capital and financial markets but we also attach much importance to improving our domestic markets and boosting our borrowings on the Russian market.

CORR.: You’ve voiced your plans up to the year 2016. But what are you planning to do in 2012?

Vladimir DMITRIEV: We’d like to carry on with the projects which are at an advanced stage of consideration at Vnesheconombank. Our priorities remain the same – they include infrastructure, new technologies, raising investments both through VEB and through our subsidiary institutions. We believe that we are not taking full advantage of VEB’s potential as a state management company because we have more than a trillion and 300 billion rubles and 900 billion of them are invested in government bonds and as little as 10 percent – in corporate debt instruments. We have to rectify this situation. There is no doubt that most pension savings funds, given their good profitability, and we can achieve it in fact should benefit the economy and help to address social tasks. Our priorities in terms of industry and some economic sectors remain unchanged. We are going as before to give high priority to supporting small and medium-sized enterprises. This is a very topical issue here in Davos. In our opinion, this is one of the most important lines of activity for the Bank for Development.

CORR: What tasks are assigned to various institutions of VEB Group?

Vladimir DMITRIEV: There is no doubt that VEB itself as I’ve already mentioned will focus on those lines of activities that are set forth by the law and the Memorandum on our Financial Policies. This document by the way is periodically changed and supplemented with new priorities determined by the state. Our commercial banks must be capitalized and they should develop sustainably demonstrating increased assets, increased loan portfolios and increased profits in the long run. Our goal is to prepare them for privatization when required prerequisites emerge. But it’s not a matter of the most immediate future. We pin great hopes on the Russian Investment Fund and the Export Credit and Investment Insurance Agency. Although these institutions were launched last year, the Agency has already concluded three contracts to support Russian exporters in Vietnam, India and China, here I mean projects that are being implemented in these countries. Today, we have discussed our further prospects for cooperating with foreign agencies in jointly promoting Russian high technology products such as for example Sukhoi Superjet 100. The Russian Direct Investment Fund has already enough projects attractive for foreign investors. And I think that three transactions can be closed in the first quarter of this year. We pin high hopes on VEB-Capital too. Our subsidiary banks in Ukraine and Belarus deliver a strong performance and are among the largest five or six banks in these countries. They should do their best to enhance integration trends and develop cooperation between Russian and these countries’ companies. So, we have serious plans with regard to all Vnesheconombank’s lines of activity and have high expectations.

CORR.: To what extent does the capital outflow from Russia give you a hard time? Doesn’t it spoil the mood of foreign investors and creditors?

Vladimir DMITRIEV: Undoubtedly, statistics on the capital outflow and the insufficient capital inflow are perceived negatively by investors. In general, investors are pretty sensitive to external environment, signals and changes of partners. Having got used to their counter parts they find it difficult to get used to new Russian partners. So, they are interested in stability, they are interested in proper changes. And they are pretty sensitive to pessimistic and even apocalyptical signals coming from Russia and from Russians living abroad even against the backdrop of favorable macroeconomic conditions and pretty stable economic situation. Investors are particularly sensitive to signals voiced by Russian representatives they consider competent. In fact, I believe that there’s nothing bad in what is happening – we are going through the situation similar to that of in Europe and other countries. We are growing up, our economy is getting more powerful, we are forming a middle class with quite other priorities and we should reckon with it without throwing a scare of a threat hanging over Russia’s political, economic and social system.

CORR.: Vladimir Alexandrovich thank you very much for your answers.