Breakthrough Strategy, 2002-2006

 

In 2002, the Russian Government became VTB’s major shareholder, acquiring from the Bank of Russia its participation in VTB’s authorized capital. A new management team headed by President and CEO Andrei Kostin joined the bank with the goal to turn VTB into the country’s leading banking institution operating in all key segments of the Russian banking market, including retail business and investment banking services.

Shortly after, VTB not only significantly increased the investment financing for the economy but also became Russia’s second bank in raising household funds. VTB simultaneously launched two large-scale programs: small business financing and development of mortgage services in Russia, which laid the long-term foundation for its leadership in the retail banking market. The Bank became a leading corporate bond manager and underwriter in Russia.

In 2004, VTB acquired Guta-Bank, and in 2005, launched the most successful project of a specialized retail bank in Russia, VTB 24. The purchase of Promstroybank (St. Petersburg) allowed VTB to significantly strengthen its position in the North-West Region and assert itself as a leader in the Russian banking market. VTB became one of the most dynamically developing credit institutions in Russia, with business growth rates increasingly higher than the market average.

At the same time, VTB launched the process of creating a powerful international banking group to be able to compete with major Western banks. VTB’s priorities abroad included:

• establishment of subsidiary network in the CIS;
• expansion of activity in Western Europe;
• entry into Asian Pacific markets.

Consistently implementing the plan to expand its presence in external markets, VTB:

• established subsidiary banks in Ukraine, Armenia and Georgia;
• acquired participations in Western Europe banks from the Bank of Russia;
• opened a joint bank in Vietnam, a subsidiary bank in Angola, and a financial company in Namibia.

In 2002, VTB obtained abroad syndicated unsecured loan, which was the largest in the history of the Russian banking system. Three years later, the Bank was the first in Russia to raise the largest subordinated loan, later named by International Financial Review as the best 2005 deal in Eastern Europe. Next year, for the first time in the history of the international financial market, Russian Rouble-denominated unsecured Eurobonds were publicly placed by VTB.

EuroWeek and International Financial Review named this placement the best 2006 deal in Eastern Europe. Later that year, VTB securitized its mortgage loan portfolio, totalling USD 88 million. It was the first issue of mortgage-backed securities in Russia.

JP Morgan Chase Bank and The Bank of New York named VTB the best clearing bank in Russia. The Bank was the first and only Russian custodian, which was awarded an international custody rating of Thomas Murray (Great Britain). The Bank provides international custody services to Russian and foreign investors. Along with Unicredit, Deutsche Bank, Citigroup and ING, VTB was named one of the top 5 custodians in Cross Border category (provision of services to international investors), according to Global Custodian (Great Britain).

In 2006, the Bank completed a large-scale rebranding, and its subsidiaries in Russia and abroad began to use the same brand, VTB:

• Promstroybank was renamed VTB North-West;
• Moscow Narodny Bank in London became VTB Bank Europe plc.;
• Eurobank in Paris became VTB Bank (France);
• the Ukrainian Mriya Bank became VTB Bank (Ukraine).

VTB Supervisory Council approved VTB Group Development Strategy for 2007-2010 aimed to continue strengthening of VTB positions in the domestic and international banking markets.

The Bank registered its new domicile in St. Petersburg, Russia’s northern capital.

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