Andrey Kostin was appointed head of VTB in 2002. During this time, the top management of the credit institution boldly managed public money, was engaged in dubious projects and was involved in numerous scandals. Andrei Kostin has repeatedly been predicted to resign, but he continues to remain at the helm of VTB.
Creative for small business
VTB Bank intends to spend 250 million rubles on advertising and promoting its services on social networks. We are talking about Facebook, VKontakte, Odnoklassniki, Instagram, Twitter, as well as YouTube and Yandex Zen. The contractor must develop a “creative concept” for VTB products for representatives of small and medium businesses, as well as for potential investors.
The controversial question remains: is such advertising necessary for small enterprises now? In a pandemic and almost complete freezing of business, many of them are threatened by bankruptcy. The press service of the Presidential Commissioner for the Protection of the Rights of Entrepreneurs Boris Titov reported on the disastrous situation of small and medium enterprises.
However, one should not be surprised at VTB’s desire to send significant money for advertising to this difficult for the Russian economy economy. Recall that VTB is one of the largest commercial banks with state participation. The state owns 60.9% of ordinary shares, the remaining 39% are in free float. Taking into account preferred shares, 92% of the group’s share capital is under state control. Since 2002, VTB has been steadily led by Andrei Kostin, and all this time the top management of the credit institution boldly managed state money.
Many VTB projects have raised many questions from independent analysts. At least the purchase of the Bank of Moscow in 2011, when VTB paid more than 150 billion rubles for a controlling stake. But after the transaction, a hole worth more than 300 billion rubles unexpectedly appeared in the balance sheet of the Bank of Moscow.
The state to “save" VTB through the DIA allocated a loan of 295 billion rubles for 10 years to the Bank of Moscow at 0.5%. In addition, another 100 billion rubles were allocated to increase the authorized capital of the Bank of Moscow.
The merger ended with the Bank of Moscow ceasing to exist. Former deputy chairman of the Central Bank Sergei Aleksashenko suggested that VTB itself needed both the purchase of the Bank of Moscow and budget injections to plug its own holes in the balance sheet.
You can recall other no less strange deals. So, before the 2018 FIFA World Cup, VTB management began a large-scale reconstruction of Dynamo Stadium. There were two goals - to hold a tournament and at the same time increase the cost of residential and commercial real estate, which was built around the stadium by the "daughter" of the state bank.
In 2009, VTB became the main owner of Dynamo Management Company, which owns lease rights to the lands of Petrovsky Park, and Dynamo FC (Moscow). As a result of the transaction, the club repaid the debt to the players and VTB itself. The total debt converted into company shares was then valued at more than $ 240 million, and the total value of 100% of FC and Dynamo managing company was $ 516 million. But in the end, the right to host the World Cup games was won by Leonid Fedun co-owner Leonid Fedun the stadium "Discovery Arena" that he built.
The trouble with the new acquisition from VTB did not end there. In 2015, UEFA for dubious financial schemes suspended Dynamo FC (Moscow) from participating in the Europa League season 2015/16. A year later, the state bank, remaining the title sponsor, sold its 74% stake in FC to Dynamo for a symbolic 1 ruble. But the point in this interesting story turned out to be a comma: in the spring of 2019, VTB Group again acquired 99.9961% of Dynamo FC for the same 1 ruble, additionally taking on obligations to restructure the club’s debt in the amount of 5.3 billion rubles.
You can build the wildest assumptions why such a castling was made.
Experts consider the acquisition of VTB retail network "Magnet" as strange. It was turned so fast that many were lost in conjecture that in general it was.
And in March this year, it became known that VTB decided to create a special fund, which will include the illiquid assets of the subsidiary - PJSC Hals Development, Don Invest and VTB Arena.
VTB acquired a controlling stake (51.4%) in Hals-Development from AFK-Sistema in 2009 for 60 rubles as a result of debt restructuring, which at that time amounted to 22 billion rubles. According to experts, the market value of the asset at that time was no more than 2 billion rubles. It turns out that instead of bankrupt Hals Development, VTB took over his debts, thereby supporting the oligarch Vladimir Yevtushenkov, the owner of AFK-Sistema, at state expense.
According to The Moscow Post, the creation of the fund may be an attempt by the head of VTB Andrey Kostin to hide the traces of the withdrawal of money from the subsidiaries.
Trustful citizens, forgetful managers
In the life of VTB, there were much more serious scandals. In 2007, a “public” IPO was announced. In a powerful advertising campaign, citizens were offered to buy VTB shares, and many beautiful words were said about the prospects for investing. 131 thousand people believed and bought VTB shares. In total, the state managed to pull about $ 1.5 billion from citizens' pockets, while VTB spent $ 153 million on the placement itself.
Andrei Kostin assured that the Ministry of Finance is watching VTB quotes and will not allow anything to go wrong. But after the placement of shares on the stock exchange began their decline. According to Marina Medvedeva, the chairman of the club of banking analysts, “unreasonably big money was invested in the promotion of VTB, which ultimately did not work.”
The results of such investments were deplorable. According to analyst of Russ-Invest German Shlyonov, over the period from the IPO in 2007 to the present day, the share price has decreased by 67%. For comparison, the Mosbirzhi index for the same period showed an increase of 95.5%, and ordinary shares of Sberbank grew by 171.5%.
Citizens had only to resent and once again reproach themselves for excessive credulity.
The international scandal that VTB found itself involved in is connected with Mozambique. In 2016, the British subsidiary of the Russian investment bank VTB Capital issued a syndicated loan supposedly for the purchase of fishing vessels for $ 535 million to the state corporation of Mozambique. Credit Suisse also participated in the financing of the project. In fact, the money was spent on upgrading the navy, which has tripled. Moreover, most of the funds settled on offshore accounts.
After the transaction, VTB organized the issuance of bonds of Mozambique, but “forgot” to notify foreign buyers of securities about a half-billion loan issued to them. Investors did not understand such forgetfulness, and filed lawsuits with the British financial regulator FCA.
In addition, as Reuters wrote, the loan was characterized by suspiciously favorable conditions. VTB received $ 35 million, or 6.5% of the loan amount, although on average banks in such transactions receive no more than 1%. Naturally, VTB denies its own benefit.
And last year, another scandal erupted, already personally associated with the head of VTB Andrei Kostin. The Anti-Corruption Foundation has published an investigation alleging that Russia-1 host Nail Asker-zade allegedly uses a Bombardier plane and a 62-meter yacht. According to the authors of the investigation, this became possible due to the close relations of the TV presenter and the president of the VTB State Bank Andrei Kostin.
According to oppositionist Alexei Navalny, the official salary of VTB Bank president Andrei Kostin could not cover the gifts of the banker’s gifts found by the banker to his lover: “This is simple mathematics. The banker Kostin, despite the fact that he runs a loss-making bank, which has been receiving state support for many years, receives a salary of several million dollars a year. But according to the monthly expenses of Naili Asker-zade, the host of Channel One, it is clear that this amount is much larger. Well, for example, just operating an airplane costs 30 million rubles a month, and this is not counting a yacht with a crew of 15 people. ”
Andrei Kostin reacted painfully to such publications. As a result, the investigation became the subject of litigation, and Roskomnadzor began to massively block websites that wrote about VTB's state bank in the context of the love story of its president Andrei Kostin. As follows from the court’s rulings, VTB demanded that the information be recognized as untrue and discredit the bank and its employees, and that its distribution should be prohibited. The press service of VTB Leasing said that the business aircraft mentioned in the investigation in 2017 were sold to other companies at a market price “due to the expected increased sanctions risks” and are not related to the VTB group.
The FBK investigation also mentions two apartments in the Novaya Ostozhenka residential complex in Moscow. The first apartments are 228 square meters. m. were also originally owned by VTB Bank. In August 2011, they were bought from singer Alexander Malinin, the head of VTB Cyprus subsidiary bank in Cyprus (RCB Bank Ltd) Kirill Zimarin. And a month later, Zimarin, under a gift contract, transferred it to Nail Asker-zade. This apartment today is estimated at approximately 270 million rubles. Thus, the journalist, who many associate with the head of VTB Bank, now lives in 380 square meters in an elite residential complex on Ostozhenka.
Also, the TV presenter owned, according to Open Media, about four months there was a plot of land on Rublevka with an area of almost 43 thousand square meters. The land was estimated at 2.8 billion rubles.
However, as you know, what is written with a pen cannot be cut down with an ax. The unprecedented blocking of the Runet did not reach its goal, and now you just need to type in the search engine the name of Andrei Kostin, then the name of the TV presenter Nail Asker-zade, as well as information about the yacht, planes, apartments appears. However, this story, like others, did not end with anything.
The fact that today top managers of state-owned banks and state corporations are accustomed to a luxurious life is not a revelation. Probably, some of them simply show this craving more than others. So, VTB Bank in 2019 increased payments to members of the board by 610 million rubles (38%). Compared to 2018, payments increased from 1.62 billion rubles to 2.23 billion rubles.
Given the originality of management, the media have repeatedly predicted Andrei Kostin's resignation, as well as the special attention of the competent structures.
But does this threaten the head of VTB? For eighteen years, Andrei Kostin has been at the helm of the WBT, which means how he manages the state-owned bank, quite happy with many influential people.