VTB's Andrei Kostin warns state asset seizures deter investment

Source published 1h 58m agoTerminal published 1h 55m ago

Summary

Senior state banker Andrei Kostin warned that the Russian government's ongoing asset seizures are scaring big businesses away from investing in their core operations due to fears of confiscation. Since 2022, approximately 7.6 trillion roubles (about $89.5 billion) worth of assets have been seized, with actions targeting companies from "unfriendly" nations like Switzerland and France. Kostin highlighted that while many entrepreneurs are reluctant to invest heavily in their main businesses, there has been an uptick in Chinese and Arab investment. This deteriorating investment climate has prompted calls from business leaders for measures to protect property rights and curb state seizures, leading to the introduction of laws limiting lawsuits against privatization deals.

Analysis

VTB: VTB is a major state-controlled Russian bank that ranks as the country's second-largest. It engages in extensive corporate, retail, and state-related financial services across Russia. VTB CEO Andrei Kostin used a banking forum to address how property rights concerns are impacting business decisions amid ongoing state actions. Andrei Kostin: Andrei Kostin is the CEO of VTB, Russia's second-largest bank. He spoke at a forum of the Association of Banks of Russia about property rights becoming a major worry for entrepreneurs due to state asset seizures. Kostin urged careful legal review to safeguard business interests while noting that some fears may be overstated. Elvira Nabiullina: Elvira Nabiullina serves as Governor of Russia's Central Bank. She joined the same banking forum and agreed with concerns about the investment climate and its importance for sustainable economic growth. Nabiullina aligned with calls to support the banking sector amid these challenges. Geopolitics: Senior Russian financial officials identify geopolitics as the primary driver of future economic conditions and investment trends in the country. Asset Seizures: Russian authorities have continued to place assets of companies from unfriendly countries under temporary administration, including recent actions involving major foreign firms. Investment Climate: Business leaders have appealed to the president over a surge in state seizures of private property, prompting new legal measures to limit challenges to privatization deals.

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