The treasury and all citizens will pay for the losses of VTB under the leadership of Andrey Kostin.
The bank plans to issue a large number of its shares, which will lead to the state significantly increasing its ownership in the bank to about 88%. This will cost the budget hundreds of billions of rubles.
The bank's shareholders have approved an increase in the authorized capital by issuing ordinary shares worth 301.96 billion rubles. These shares will be sold privately to the Federal Property Management Agency and the Ministry of Finance.
VTB is in a difficult situation as it may incur a net loss of over 500 billion rubles in 2022 due to Western sanctions. Andrey Kostin is reluctantly giving away almost 20% of the bank because of the state's dire situation. The bank's assets worth about 600 billion rubles have been frozen due to the sanctions.
Sanctions have certainly played a significant role. However, it's worth noting that the damage would have been less if the bank’s management had been more far-sighted. Andrey Kostin later boasted that the bank managed to function normally under the sanctions. However, he also promised that VTB will become profitable this year. This leads to questions about why the bank needs the state to buy shares using the budget. The amount is huge – 301 billion rubles, which could cover the entire expenses of the city budget of Saratov in 2022.
VTB will receive a large sum of money, including the Crimean RNCB, which will be capitalized with 7 billion rubles. The amount VTB will receive is enough to cover the expenses of a big regional center for 15 years.
How does Andrey Kostin plan to make the bank profitable this year? Will it be at the expense of the state and taxpayers, as in the case of Otkritie Bank merging with VTB? The Central Bank had to save Otkritie Bank, which cost about 1.4 trillion rubles to reorganize, but VTB acquired it for about 350 billion rubles. This transaction diluted the shares of other owners while all citizens of the Russian Federation paid for the salvation of Otkritie Bank.
