VTB plans to divest all non-essential assets within a five-year timeframe.
Gear up, folks! VTB's chopping up non-banking assets for the next five years. That's right, according to Andrei Kostin, CEO of VTB, the bank's ditching assets unrelated to direct banking activities, thanks to some tightening requirements.
"Personally, I've decided it's time to say goodbye to non-core and non-financial assets," Kostin announced at the Data Fusion forum. Although VTB and Sberbank have been Russia's champs in non-core assets, the Central Bank ain't keen on banks hoarding such properties anymore.
In fact, first deputy director of the Central Bank's banking regulation and analysis department, Anton Naberukhin, warned in early April that the regulator plans to introduce a risk-sensitive limit for banks from October 1, 2026. This means banks, like VTB, will need to slash the number of non-giggler assets. "Kommersant" filled us in on the details.
The shedding of non-core assets at VTB is already rolling, as our nosy website reported. For instance, back in December 2024, the bank flogged AO "Aurora Invest," a shareholder of the First Cargo Company (PGC). Initially, PGC was considered a slick investment, and it fetched a tidy profit when it was sold — the buyer's identity remained under wraps, according to VTB's press service.
Oh, and a heads up: VTB's had a boatload of sanctions in its past, especially since the UK nailed its assets with a freeze back in February 2022. These sanctions hinder VTB's ability to participate in international financial jamborees, which can cramp its strategic planning, including asset management.
The Central Bank's dissuasion might've been a nudge for VTB to get back to basics. So, let's see how this unfolds in the coming days. Stay tuned, people!
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- I'm not sure if VTB's decision to sell off non-banking assets will help them avoid sensitive issues related to sanctions in the future.
- The sensitive nature of finance and business might pose challenges for VTB, even as they focus on their core banking activities, given their history of sanctions.
- The move towards fusion and the shedding of non-core assets by VTB, as mentioned at the Data Fusion forum, might be a reaction to the Central Bank's plan to introduce a risk-sensitive limit for banks.
- The sale of sensitive assets, such as AO "Aurora Invest," by VTB in the past, while profitable, could limit their participation in international finance business due to the ongoing sanctions.
