Page 169 - RusRPTAug24

with Europe. China’s mutual trade with Russia exceeded $200bn last year.
Direct payments in yuan have increasingly been frozen or delayed following the US's expansion of sanction criteria in June after the new smart sanctions regime was introduced in December. In addition, VTB's Shanghai-based subsidiary and smaller Chinese border banks have restricted the conversion of rubles into yuan, affecting the financial operations between Russia and China.
The cessation of services by major Chinese banks like Bank of China and ICBC reflects the broader challenges faced by financial institutions operating under the shadow of US sanctions. As the mid-August deadline approaches, the future of yuan-based transactions on the Moscow Exchange remains uncertain.
Russia and China are studying the possibility of cooperation on the Mir payment system. This was reported by the republic's ambassador to Moscow, Zhang Hanhui, in an interview with Izvestia, answering the question of whether China plans to accept Russian cards. “Currently, relevant financial institutions of China and Russia are studying the possibility of cooperation on the Mir payment system,” he said. Zhang added that China is issuing “Opinions on Further Optimizing Payment Services to Improve Payment Convenience.” This allows foreign tourists in China, including those from Russia, to link foreign bank cards to Chinese payment platforms for domestic payments.
The government has approved VTBs acquisition of Post Bank. On July 15), the head of VTB, Andrei Kostin, told the Russia 24 TV channel that the bank had agreed with the government to buy out the share of Russian Post in the joint Post Bank (each party owns a share of approximately 50%). The latter has been on the SDN list since November 2023. The price parameters of the transaction will be determined after an assessment (according to RAS, Post Bank's own funds at the end of 1Q24 amounted to RUB 79bn). The VTB Deputy Chairman noted that the integration format (full consolidation or maintaining a separate brand and license) has yet to be determined. VTB's strategy for 2024–2026 provides for active development in the retail segment with expansion into the regions. The acquisition of a stake in Pochta Bank, which specializes in the retail segment and has an extensive network of post offices, fits into this strategy. Also on Monday, trading in VTB shares began after a reverse split. As part of the latter, ordinary shares were combined in a ratio of 5,000 to 1, and the number of ordinary shares decreased to 5.4bn. At the end of the first day of trading, quotes fell by about 7%.
VTB has significantly improved its financial forecast for this year: now the bank expects to earn RUB 550bn in net profit, although in February it expected RUB 435bn, First Deputy Chairman Dmitry Pyanov said during a teleconference. The updated target is 27.3% higher than last year's profit and already exceeds the strategic goal for 2025 of RUB 520bn.
169 RUSSIA Country Report August 2024 www.intellinews.com