VTB head announces discontinuation of cooperation with Deripaska’s business

VTB head announces discontinuation of cooperation with Deripaska’s business
Oleg Deripaska and Andrey Kostin Photo: Sergey Guneev / RIA Novosti

VTB head has announced his company is to discontinue cooperation with Oleg Deripaska’s business. The bank will not give his companies new loans “until the sanctions are removed.”

VTB has suspended its cooperation with billionaire Oleg Deripaska, who is under sanctions. The bank does not issue new loans to his companies, Chairman of VTB Board Andrey Kostin said in an interview with CNBC.

“Of course, we no longer lend him money nor conduct any operations with him, UC Rusal and other [his companies],” Kostin said, answering the question about whether the bank should reconsider relations with Deripaska's business after new sanctions.

“We are waiting for the decision of the Office of Foreign Assets Control (OFAC, a division of the US Treasury dealing with sanctions — RBC editor’s note). This is what we have to do,” he said. Earlier, OFAC reported about its readiness to remove sanctions from UC Rusal and En+, if Deripaska’s share in them falls below 50%.

Nevertheless, the VTB administration is “hoping that the problem will be solved.” “Because we are his big creditor; we must have our money back in one way or another,” they added.

When asked whether this means that VTB excludes any future cooperation with Deripaska because of the US Treasury’s actions, Kostin said “Of course, and with the company (RusalRBC editor’s note), until the sanctions are removed.”

VTB’s attitude towards other billionaires under US sanctions is somewhat different. According to Kostin, “It's very difficult to determine,” who will fall under sanctions next. “The selection of people — such as Deripaska and Vekselberg — has no logic. I don’t know why it was Vekselberg, and not someone else. It could have just as easily been other 200–300 people. We cannot cease our work with all big businesses in Russia. We will continue until there is some decision,” Kostin concluded.

April 6, the US Treasury announced sanctions against 24 Russians and 14 companies from Russia, including ex-President of En+ Deripaska, Gazprom СЕО Alexey Miller, Chairman of VTB Board Andrey Kostin, Senator Suleyman Kerimov, and Chairman of Renova Group of Companies Viktor Vekselberg.

Due to US sanctions, UC Rusal shares on the Hong Kong stock have fallen to historic lows. A month after the introduction of sanctions, the company assesses their impact on its business as negative.

Sanctions can be removed from UC Rusal and En+ if Deripaska reduces his share in these companies to below 50%. The billionaire has already left the board of directors of En+ and will reduce his share in En+ in the near future, which will also lead to the loss of control over UC Rusal.

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