UPDATE 2: CEO: VTB to decide on Ukrainian business sale or axe in 2017

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MOSCOW, Mar 28 (PRIME) -- VTB wants to sell its Ukrainian unit at a high profit and will continue to think whether to sell it or continue curtailing business of the affiliate throughout 2017, while sale of a smaller subsidiary BM Bank is about to be signed, CEO Andrei Kostin told reporters on Tuesday.

“We want a really good deal, a real sale deal. We see two ways, either to sell the bank, or to reduce the balance of the bank stage by stage,” Kostin said, adding that the VTB headquarters expects to make the decision in 2017.

He said that negotiations to sell BM Bank is at a final stage. “But the deal is small,” Kostin said.

He also said that VTB has not limited the payments in Ukraine.

The bank does not rule out a takeover in Ukraine but does no fear it. “We have seriously reduced the amount of operations there, losses will be insignificant. A takeover, so be it. We have no fear but we do not rule out such a possibility,” Kostin said.

VTB will use an opportunity provided by the Russian central bank to make reserves against the losses in Ukraine under Russian Accounting Standards (RAS) by installments. “We will use it anyway, regardless of whether (the amount of the additional reserves) will be small or large.”

The situation depends on the speed of recovery of accounts receivable, Kostin said. “But they are insignificant, as the central bank has already said, the work of the largest banks will not be destabilized because we took the heat over the last three years,” he said.

Earlier in March, Ukrainian President Pyotr Poroshenko introduced sanctions against five Russian banks – Sberbank, VTB Ukraine, BM Bank, a unit of the Bank of Moscow, Prominvestbank and VS Bank of Sberbank – for a year, prohibiting them from disinvesting from the country, as well as barring Ukraine’s state-owned companies from depositing funds with the banks. Deputy Chairwoman of the National Bank of Ukraine Yekaterina Rozhkova said that Russian state banks should better sell their Ukrainian assets.

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