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

CORR: Good afternoon Vladimir Alexandrovich. Thank you very much for finding the time to talk with us. Let us sum up what has been just said at the conference especially under conditions of sanctions. What instruments – financial, administrative – do our exporters need the most?

Vladimir DMITRIEV, Vnesheconombank Chairman: Exporters in all spheres need to have industrial exports support institutions. At the Conference today we have said that a system of industrial exports comprehensive support is in place in our country. It is comprised of the Russian Economic Development Ministry, the Russian Ministry of Industry and Trade and development institutions themselves that are responsible for providing support. They include Vnesheconombank – Bank for Development and Foreign Economic Affairs, the Export Insurance Agency of Russia (EXIAR) and Russia’s largest leasing company VEB-Leasing, which is Vnesheconombank’s subsidiary. We also mentioned the fact that by creating this system we provide exporters not only with financial and insurance support but also with necessary information resources, which are of primary importance for exporters to know what mechanisms are available for Russian exporters to promote their products to foreign markets.

CORR: As far development of these institutions is concerned, last week you approved Strategy 15-20 and it was not a basic version but an upgraded one. What sort of version is it? What are its main points?

Vladimir DMITRIEV: In fact, last week we had a meeting of Vnesheconombank’s Supervisory Board, which approved a program of Vnesheconombank’s development, we call it a Strategy. Several versions were offered. Despite everything: despite a serious situation with the budget, despite the sanctions, our country should develop and development institutions should develop and be instrumental in developing the Russian economy. So, an upgraded version was approved. It provides for Vnesheconombank’s loan portfolio to increase to 2.5 trillion rubles by 2020. And an important thing is that Russian industrial exports with the assistance of Vnesheconombank and its subsidiaries will be provided with a support of 750 billion rubles, with 500 billion rubles accounting for credit support and 250 – for guarantee support. Of course, we hope that our subsidiaries will be supported and additionally capitalized, here I mean above all Roseximbank and this will enable a Center for Credit and Insurance Support, being created on the basis of EXIAR and Roseximbank, to operate in full strength. It should be kept in mind that Vnesheconombank was established among other things to support small and medium-sized enterprises and our strategy provides for supporting this segment of the Russian economy in the amount of 250 billion rubles. In approving our Strategy, the Government is aware that without the state’s support measures both in terms of liquidity and in terms of the Bank’s capitalization, it would be very difficult, if at all, to achieve the said results. So, these issues were also discussed. We discussed them at the meeting with the Russian Prime Minister where we considered measures for the state’s support of Vnesheconombank including its additional capitalization and the Bank’s fulfilment of obligations it assumed under credit agreements as well as repayment of debts to foreign creditors and capital markets.

CORR: What about the amount? If I am not mistaken, we talked about a basic scenario that provide for about 100 billion and if we talk about an upgraded scenario it must be even more.

Vladimir DMITRIEV: The fact is that under this strategy and given the need to increase its loan portfolio, the Bank is to be additionally capitalized in the amount of at least 30 billion rubles per year. As far as other support measures are concerned, the state believe that it and the Central Bank would expand the range of instruments to provide Vnesheconombank with liquidity. We can feel this support even now and we are grateful to the Central Bank for increasing Vnesheconombank’s limit from half capital to capital upon mutual guarantees of banks and this is more than 500 billion rubles. We are also holding talks with the Finance Ministry about expanding the range of instruments available for Vnesheconombank from the Finance Ministry and we can see positive reaction on the part of the Finance Ministry. I have already said today that in order to implement our strategy of supporting industrial exports we need financial resources to subsidize interest rates and extend credits to foreign importers. Now the Economic Development Ministry and the Ministry of Industry and Trade are considering our requests for an amount of 14 billion rubles - this a total amount of support to subsidize interest rates that we need to ensure the export of Russian industrial products to foreign countries.

CORR.: You have signed another very important agreement with the Export-Import Bank of China for an amount of 2 billion dollars. Do you know what projects you are going to finance with these funds?

Vladimir DMITRIEV: We have discussed concrete projects with our Chinese partners. The projects are associated with supplying Chinese equipment to Russia. I mean above all timber-industrial complex. I would not like to name specific projects now but they deal with timber-industrial complex, mechanical engineering production facilities, that is, sectors where Chinese equipment is competitive with the best foreign analogues.

CORR: And now my last question. On October 28, sanctions against Russia might be reconsidered. What’s your forecast? I guess it’s a thankless job to make forecasts especially about such geo-economic issues. Nevertheless, do you believe that sanctions might be softened a few days from now?

Vladimir DMITRIEV: In this respect, I have a conservative view. I don’t think that our foreign partners are likely to change their approaches to Russia. I believe that their policy toward Russia is linked not only to the situation in Ukraine although they say it is. I think there are deeper reasons. It remains to be seen. But I’d like to stress it once more that this time my position is rathere conservative.

CORR.: Thank you very much for your interview, Vladimir Alexandrovich.

Vladimir DMITRIEV: Thank you.