VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
Vladimir Putin: Mr. Kostin, could you please tell me how things are with you.
Andrei Kostin: This week, we published official figures for the first half of the year. They are very good. Our profit has gone up by five percent, the credit portfolio by 30%, mortgage and consumer credit by 60%.
Needless to say, the third quarter was worse. The financial market was very volatile in the last few weeks but resolute measures were taken, primarily by the Finance Ministry and the Central Bank, to redress the situation.
Now it is stable. I mean both interbank lending and the stock exchange. But we realize that serious upheavals in the U.S. financial markets will have an adverse effect on Europe, Asia, and Russia.
We believe that our financial sector will manage to get out of the predicament with fewer losses than other countries. However, additional efforts will have to be taken. I think the government should support this sector with long-term resources.
I would like to make one more point. Russia, its business and financial sector should display much responsibility. It is important to realize that the time of large sums of cheap money is over. The time of super profit is also gone.
It is important to display serious responsibility in decision-making, risk assessment, and credit discipline, and choose primarily those projects which are effective, give quick return, and promote economic growth. Business should concentrate on this task. Relying on government aid alone is wrong. I think that the market will punish those who will be unable to change or will wrongly assess the situation.
Putin: Mr. Kostin, this also applies to your institution.
The government hopes very much that you will work correctly with your junior partners, with medium-size banks, which are not as powerful as yours, and, maybe, which do not have such direct assistance from the government.
But the agreements between you, the Central Bank and the Finance Ministry of your role in the financial sector must be fulfilled.
Kostin: Naturally, we understand our responsibility as a backbone bank. No doubt, these activities will be continued. We will perform these functions, and will also closely cooperate with the Finance Ministry.
Putin: What links do you have with the so-called real economic sector? This is the first question. And the second question: what can you say about the development of your affiliates, including subsidiaries abroad?
Kostin: We have about 20 subsidiaries abroad, in different parts of the world. We have them in the new markets, China and India. Probably, we could operate more actively in Western Europe since we have banks in Germany and France. This is acquiring special importance during the current instability of Western financial institutions.
Putin: Maybe, you should buy something? I mean something that lies in temptation's way.
Kostin: Mr. Putin, expansion is the right choice during times like these, of course. But one should be very cautious because financial institutions are like fruit. They may look nice on the outside but be rotten inside. Therefore, we have to work hard and understand whether we can cope with this, particularly in a crisis.
We are looking, of course, both in Russia and abroad. I think the main goal is to preserve Russian assets, to prevent them from going abroad because companies have rather big debts. Many shares of Russian companies are pledged in them. We are doing much to help our clients keep their commitments to foreign banks, and prevent them from being written off in favor of foreign banks. Otherwise, a considerable part of the Russian economy can move into other countries. I think this is a very important task today.
Later on, we should certainly think about expansion.
Putin: And what about your links with our Russian real sector? What about the projects which you have developed and backed?
Kostin: We are permanently increasing our credit portfolios. We hope that we will manage to preserve a certain level of crediting to guarantee steady growth of the GDP. Needless to say, we have to look at risk zones. Some overheated sectors should probably be reduced a bit, whereas others should receive the bigger part of resources.
On the whole, we are taking part in different social programmes, and priority national projects, in medicine for one. We are also in charge of large-scale construction. We are developing this in a big way. Let me repeat that in the last six months our credit portfolio went up by 30% and all of this is in the real economic sector.
Putin: You should not have incomplete construction on a large scale.
Kostin: Yes, I think we should concentrate on completing the already launched projects. Probably, we should impose some restrictions on the projects which are still in R&D.
