President of Russia Vladimir Putin: Mr Kostin, shall we start with this year’s performance?
President and Chairman of VTB Bank Management Board Andrei Kostin: Yes, Mr President. We have achieved good results and expect record high profits that are likely to exceed 300 billion rubles. I think that the main reason for this is mostly the favourable economic situation in the country, including high growth rates, growth of incomes, and a surge in our clients’ profits. On the whole, it is a good and favourable situation.
The second reason is that we have implemented an in-depth digital transformation at the bank, the so-called 600 Days programme, which has put the bank at the level of most advanced banking technologies. This, of course, has boosted the effectiveness and profitability of our work.
If we take other indices, the real sector lending portfolio has increased by eight percent over the first ten months of this year. We have actively joined the programme of aid to small and medium-sized businesses, the so-called FOT 3.0 (Payroll Fund), which was launched, pursuant to your instructions, on November 1. This programme makes it possible for small and medium-sized businesses to retain their employees. The VTB Bank accounts for almost a quarter of all loans under this programme.
As for our outreach efforts, the bank’s lending portfolio has grown by 18.4 percent, predominantly due to mortgages, which are in huge demand, even despite the trend towards higher interest rates. For the first time, we have lent one trillion roubles within 11 months, which has enabled some 300,000 families to move into better housing.
We are actively using the state preferential-rate mortgage programmes, with approximately a quarter of all mortgage loans being in the government-subsidised preferential category. Right now, we are introducing new products, such as the so-called eco-mortgages involving a 1.6 percent reduction in the interest rate, provided a lender buys housing conforming to the highest environmental standards. We will develop this trend.
Actually, we recently approved a new strategy for the bank’s sustainable development at a supervisory board meeting. This will become our main action plan in the long-term.
Vladimir Putin: What kind of a strategy is this?
Andrei Kostin: We prioritise two main areas, namely, the environment and the social dimension.
The environment has now become something fashionable, and everyone is rushing to deal with this matter. We believe that the social aspects of the activities of any company or bank are no less important and, maybe, even more important than the environment. What do I mean? We are developing a number of social products to support, first and foremost, the least protected strata of the population – senior citizens and children. For example, we provide senior citizens with free insurance from all types of fraud, they are the most vulnerable category of the population.
Vladimir Putin: They are trusting.
Andrei Kostin: They are trusting. To the best of our knowledge, instead of using high-tech systems, confidence tricksters simply resort to telephone calls, and they persuade these people.
We also pay certain bonuses and additional sums to senior citizens when they open an account.
Besides, we stipulate additional bonuses for children when the state remits the so-called school payments, and we have also introduced free oncology-risk insurance for children. About 50,000 children have already received these insurance policies. So, we will be working hard.
Regarding the environmental dimension, we are working actively with “green” bonds, and we have issued such bonds worth 140 billion rubles since early 2021. Next year, we are planning to start trading in carbon units together with the Moscow Exchange. This will become a new and very promising market.
We remain mindful about our traditional forms, and our clients can plant trees with just a few clicks. Four million trees have already been planted. And I would like to recall that you planted over 1,000 pines in the Irkutsk Region in April 2018. Before coming here, I inspected them, those pines are growing well, they are already absorbing carbon dioxide, and everything is all right.
Vladimir Putin: Mr Kostin, I would also like to thank you for facilitating the bank’s cost-effective development, for ensuring its highly significant status for the country’s economy, and I would like to congratulate your entire team on their successful performance this year.
Andrei Kostin: Thank you, Mr President. Thank you very much.