Page 111 - RusRPTApr24

8.1.8 Bank news
Several Chinese banks have stopped accepting payments in yuan from Russia, reports Vedomosti on March 21. The US has been increasingly its campaign to cut Russia off from the international financial system and threatened international banks with secondary sanctions if they do business with Russia. That has already led to several Chinese banks to pull out Russia, but now even domestically based Chinese banks are refusing to do business with their Russian counterparts. The Chinese banks notified clients about the decision to withdraw their services and return transactions in the last two months. Office of Foreign Assets Control (OFAC) issued the threat of secondary sanctions to international banks in a little noticed order on December 22 which has had major repercussions for Russian banking. OFAC’s notice is not a sanction per se, but a written threat, but has been more effective than many of the sanctions imposed in the last two years. Amongst the banks involved were Ping An Bank and Bank of Ningbo, which rank 13th and 15th in China in terms of capitalization, as well as China Guangfa Bank, Kunshan Rural Commercial Bank, Great Wall West China Bank, Shenzhen Rural Commercial Bank, Dongguan Rural Commercial Bank and China Zheshang Bank, reports Vedomosti. Leading Chinese bank Chouzhou Commercial Bank has ceased all financial dealings with Russia on February 7, potentially leading to significant disruptions in logistics for Russian importers. A source from a Russian bank noted that its financial institution now carries out settlements in yuan with China, with the exception of the banks mentioned above. For this, the SWIFT system and the Russian analogue of Financial Communications System (SPFS) are used. In December 2023, Biden signed a decree according to which the Federal Reserves was given the authority to impose simplified penalties on banks that violate sanctions against Russia.
Net profit of VTB Group for 2025 is set at 520bn rubles ($5.69bn), according to the presentation of the bank’s strategic goals for 2024-2026. In 2024 VTB expects 435bn rubles ($4.76bn) of net profit, while in 2025 this figure will reach about 520bn rubles ($5.69bn), in 2026 - around 650bn rubles ($7.12bn). In addition, according to VTB forecast, the share of the credit market for individuals in 2026 will be 20%, for legal entities - 18%. At the same time, according to VTB forecast, the key rate in 2026 will be 9% with inflation of 4%.
VTB has included in its three-year strategy an increase in net profit under IFRS to around 650bn rubles ($7.1bn) at the end of 2026, President and Chairman of the VTB Board Andrey Kostin said at a meeting with members of the shareholders advisory council, analysts, and reporters. "By 2026, we plan that our profit will grow to about 650bn rubles," Kostin said, clarifying that he meant the results of 2026. The market share by assets within the framework of the strategy should reach at least 18% and VTB plans to occupy at least 15% in foreign economic activities. At the end of 2023, VTB Group
111 RUSSIA Country Report April 2024 www.intellinews.com