Wikipedia

VEB.RF

VEB.RF, or VEB (Russian: ВЭБ.РФ), is a Russian state development corporation and investment company. It was the Russian successor entity of the Foreign Trade Bank of the USSR, renamed Vnesheconombank in 1988 and dismantled in 1991. VEB (for Vnesheconombank) was re-organized in 2007 as a development institute, and rebranded as VEB.RF in 2018.[3] It has financed more than 300 projects.[citation needed]

VEB.RF
Native name
ВЭБ.РФ
FormerlyVnesheconombank, VEB
Company typeDevelopment corporation
IndustryInvestment
Founded1922 (as bank), 2007 (as development institute)
Headquarters
Moscow
,
Russia
Key people
Igor Shuvalov (chairman)
BrandsVEB.RF, VEB
₽8.4 bn[1] (2020)
Total assets₽3,406 bn[1] (2020)
Total equity₽689 bn[2] (2020)
Websiteveb.ru/en

History

edit

Initial legacy of the Soviet Vnesheconombank

edit

In 1988, the Foreign Trade Bank of the USSR was renamed Vnesheconombank of the USSR ("Bank for Foreign Economic Affairs of the USSR").[4] With the dissolution of the Soviet Union in 1991, the operations of the Soviet Vnesheconombank outside of the RSFSR were nationalized by the respective post-Soviet States. On 17 December 1991, Vnesheconombank accounts in Russia were frozen because of lack of funds.[5]

For approximately seven years during the 1990s, the Kremlin's obshchak («общак») or black cash was stored in the vaults of Vnesheconombank (VEB) because Viktor Gerashchenko stated that in 1992 VEB became an agency for the return of the state debt of the USSR due to a decree by the Supreme Soviet: "Vnesheconombank does not have a central banking license. It does not need it, since it does not conduct any commercial operations." He also added, "Due to the lack of a license, this is the only Russian bank that the Central Bank does not check – it does not have the right."[6]

In 2002, Vnesheconombank was restructured and it claims to have stepped up its efforts in servicing government programs, and reduced the scope of its commercial business and gave a higher priority to supporting the government's structural reforms.[4]

In April 2002, VEB was appointed Vnesheconombank agent for investing temporarily free Pension Fund's assets in securities denominated in foreign currency, and in January 2003, a special structural subdivision to handle pension funds was formed; VEB was appointed the "State Trust Management Company" responsible for investing Russia's pension funds.[4]

From 2005 to 2006, both the assets and liabilities of the bank doubled from around $6 billion to $12 billion, and the income rose from $239 million to $301 million.[7]

Bank of Development (2007–2018)

edit

In April 2007, Russia's State Duma passed the federal law "On Bank for Development," which regulated VEB's legal conditions and made it a state development bank.[8][9]

Vladimir Putin increased lending when he became the VEB's chairman of its supervisory board in 2008.[10][a] By late 2009, VEB quadrupled its assets to nearly 2 trillion rubles ($65 billion),[11] it was seen by the government as an off-budget fund, used to put off budget expenses.[11]

In July 2014, the United States Department of the Treasury imposed economic sanctions that greatly restricted U.S. persons and entities from providing doing business with VEB after the 2014 pro-Russian unrest in Ukraine.[12] Between 2014 and 2017, the Russian Ministry of Finance spent $10 billion on the bank.[10]

VEB has suffered massive losses in 2014–2015, leading to a 330 billion rubles government bailout in 2015,[13] followed by 150 billion rubles in 2016 and a similar amount planned for 2017.[14][15] VEB was the main lender for the 2014 Winter Olympics, and many of the loans originating from the games missed original returns forecasts, or had to be restructured.[16]

In March 2016, the bank was promised a $2.2 billion bailout from the Russian government.[17] Sergey Gorkov, a former senior executive at Sberbank, was appointed to lead VEB and come up with a turnaround strategy, which included the sale of non-core assets.[18] The government originally offered the position to German Gref, who turned down the job.[11]

In March 2017, Ukraine imposed sanctions on Vnesheconombank (and other Russian state-owned banks operating in Ukraine: Sberbank, VTB Bank, VS Bank, Prominvestbank, and BM Bank) as part of its continued sanctions on Russia for its annexation of Crimea and involvement in the War in Donbass.[19][20][21] After that, the bank tried to sell its Ukrainian subsidiary; as of August 2017 unsuccessfully.[19] At Sochi in February 2018, Vnesheconombank's Sergey Gorkov said they hoped to sell its Ukrainian subsidiary, Prominvestbank, by May 2018.[22]

In 2017, the bank's debt was $17 billion, including $14.2 billion in Ukraine.[10] In January 2017, Gorkov released the bank's "Strategy 2021," which predicted relief from sanctions, resuming borrowing in the United States, and shifting risks to the government's budget.[10] According to a report the New York Times published in May 2017, 40% of the bank's loans were at risk of default.[10]

State Development Corporation (from 2018)

edit

In May 2018, Igor Shuvalov replaced Gorkov as VEB's new chairman.[23] In July 2018, the bank requested a further $16 billion bailout from the Russian government.[23] In October 2018 the bank announced plans to rebrand, changing its denomination into 'National Development Institute', and confirming it would be granted 600 billion rubles ($9.1 billion) in subsidies from the federal budget by 2024, in addition to the 125 billion rubles received in 2018.[24]

The net profit for the 2018 amounted to 3.85 billion rubles after a loss to 200.4 billion rubles a year earlier.[25] The net profit for the first quarter of 2019 17.6 billion rubles.[26]

In 2019, after a long period when VEB.RF, instead of financing new projects, was engaged in servicing distressed assets, new investment projects appeared in the portfolio of the state corporation. In the framework of VEB.RF went into the development of the Udokan's copper deposit ($490 million), the production of sulfuric acid at the "KuibyshevAzot" and capacity expansion of "Shchekinoazot" for the production of methanol (the total participation of the corporation 8.5 billion.).[27] VEB.RF started financing the project of construction of six large-tonnage vessels at the Zvezda super-shipyard near Vladivostok. Also VEB.RF, Gazprombank and Sberbank announced the funding of the development of the Talitsky area of the Verkhnekamsk potash deposit in Perm.[28] VEB.RF and Sberbank will provide a syndicated loan for the modernization of Novaport group's regional airports in six cities of Russia, and together with Rockwell Capital will build the largest pulp and paper mill in Siberia.

Sanctions

edit

VEB.RF was sanctioned by the United Kingdom from 1 August 2014 in relation to Russia's activities in Crimea,[29] and was sanctioned by New Zealand in relation to the 2022 Russian invasion of Ukraine.[30]

In February 2022, due to Russia's invasion of Ukraine, together with its subsidiaries, it was included in the US sanctions list, SDN, which provides for the maximum possible restrictions and a complete freeze of assets.[31][32][33] The bank was also disconnected from the SWIFT interbank payment system, and included in the sanctions list of Singapore.[34]

Organisation

edit

Since May 2018, the chair of VEB.RF has been Igor Shuvalov .[35] The highest governing body of VEB.RF is the Supervisory Board, itself chaired by the Russian Prime Minister.[36]

VEB.RF coordinates development institution in Russia,[37] and is a Russian state corporation with the goal of supporting and developing the Russian economy. According to a filing pursuant to the Foreign Agents Registration Act, it is not owned, nor directed, by the government or any political party.[38]

Previous chairs of Vnesheconombank include Tomas Alibegov, who was First Deputy Chairman and acting Chairman 1989–1997, Andrey Kostin (1996–2002),[39] Vladimir Dmitriev (2004–2016),[40] and Sergei Gorkov (2016–2018).[41]

See also

edit

Notes

edit
  1. ^ By law in 2008, the Russian Prime Minister is VEB's chairman of its supervisory board.[10]

References

edit
  1. ^ a b "ВЭБ в 2020 г. получил 8,4 млрд руб. прибыли по МСФО против убытка годом ранее". Archived from the original on 2021-03-29. Retrieved 2021-03-29.
  2. ^ VEB.RF Group IFRS 2020 Result
  3. ^ "Russia's Vnesheconombank revamped into VEB.RF, to get up to $22bn support". BNE Intellinews. 31 October 2018.
  4. ^ a b c "History". Vnesheconombank. Archived from the original on 31 May 2017. Retrieved 3 June 2017.
  5. ^ "ВЭБ // О Банке // История" [VEB // About the Bank // History]. old.veb.ru (in Russian). May 2012. Archived from the original on 11 May 2012. Retrieved 8 April 2022.
  6. ^ Наталья, Морарь (Morar, Natalia) (10 December 2007). "«ЧЕРНАЯ КАССА» КРЕМЛЯ" [THE KREMLIN'S BLACK CASH REGISTER]. The New Times (in Russian). Retrieved 13 September 2022. «У Внешэкономбанка нет лицензии ЦБ на банковскую деятельность. Она ему и не нужна, поскольку никаких коммерческих операций он не проводит, — говорит бывший глава Банка России. — В связи с отсутствием лицензии это единственный российский банк, который Центробанк не проверяет — не имеет права».{{cite news}}: CS1 maint: multiple names: authors list (link)
  7. ^ ""VEB Annual Report 2006"" (PDF). Archived from the original (PDF) on 2010-12-01. Retrieved 2008-01-24.
  8. ^ "VEB Profile". VEB. Archived from the original on 1 November 2014. Retrieved 29 November 2014.
  9. ^ "Law on bank for development" Archived 2008-02-25 at the Wayback Machine, VEB
  10. ^ a b c d e f Protess, Ben; Kramer, Andrew E.; McIntire, Mike (5 June 2017). "Bank at Center of U.S. Inquiry Projects Russian 'Soft Power'". The New York Times. p. A1. Archived from the original on 5 June 2017. Retrieved 5 June 2017.
  11. ^ a b c Hobson, Peter (3 March 2016). "How Putin's Bank Became Russia's $20 Billion Problem". The Moscow Times. Archived from the original on 1 July 2018. Retrieved 6 October 2018.
  12. ^ U.S. Department of Treasury. "Announcement of Treasury Sanctions on Entities Within the Financial Services and Energy Sectors of Russia, Against Arms or Related Materiel Entities, and those Undermining Ukraine's Sovereignty" Archived 2017-02-08 at the Wayback Machine 16 July 2014.
  13. ^ "How bad is it really at Russia's VEB?". bne IntelliNews. Archived from the original on 13 April 2017. Retrieved 12 April 2017.
  14. ^ "Russia's VEB chairman sees difficulties redeeming debt in 2017". Reuters. 10 November 2016. Archived from the original on 13 April 2017. Retrieved 12 April 2017.
  15. ^ "Announcement of Treasury Sanctions on Entities Within the Financial Services and Energy Sectors of Russia, Against Arms or Related Materiel Entities, and those Undermining Ukraine's Sovereignty". United States Department of the Treasury. 16 July 2014. Archived from the original on 19 May 2020. Retrieved 3 June 2017.
  16. ^ Voronova, Tatiana (19 December 2017). "Russia's VEB to transfer Globex to the state as it tackles Sochi..." Reuters. Archived from the original on 6 October 2018. Retrieved 6 October 2018.
  17. ^ Kottasova, Ivana (30 March 2016). "The latest Russian bank bailout is not like all the rest". CNNMoney. Archived from the original on 2 June 2017. Retrieved 27 June 2017.
  18. ^ "Kushner meeting shines spotlight on Russian bank". Financial Times. Archived from the original on 25 June 2017. Retrieved 27 June 2017.
  19. ^ a b Ukraine blocks sale of subsidiaries of Russia's Sberbank, VEB – media Archived 2017-08-02 at the Wayback Machine, UNIAN (29 July 2017)
  20. ^ Пороше́нко, Петро́ Олексі́йович (March 15, 2017). "УКАЗ ПРЕЗИДЕНТА УКРАЇНИ №63/2017: Про рішення Ради національної безпеки і оборони України від 15 березня 2017 року Про застосування персональних спеціальних економічних та інших обмежувальних заходів (санкцій)" [DECREE OF THE PRESIDENT OF UKRAINE No. 63/2017: On the decision of the Council of National Security and Defense of Ukraine dated March 15, 2017 "On the Application of Personal Special Economic and Other Restrictive Measures (Sanctions)"]. President of Ukraine website (in Ukrainian). Archived from the original on March 1, 2018. Retrieved February 28, 2018.
  21. ^ Пороше́нко, Петро́ Олексі́йович (March 16, 2017). "Глава держави затвердив санкції щодо низки російських банків" [The head of state has approved sanctions against a number of Russian banks]. President of Ukraine website (in Ukrainian). Archived from the original on March 8, 2018. Retrieved February 28, 2018.
  22. ^ Talant, Bermet (20 February 2018). "Russian state banks leaving Ukraine because of sanctions, attacks by nationalists". Kyiv Post. Archived from the original on 23 February 2022. Retrieved 26 February 2018.
  23. ^ a b Pismennaya, Evgenia (3 July 2018). "Putin's Sanctions-Hit VEB Is Said to Plan Appeal for $16 Billion". Bloomberg. Archived from the original on 6 October 2018. Retrieved 6 October 2018.
  24. ^ "Russia's Vnesheconombank revamped into VEB.RF, to get up to $22bn support". BNE Intellinews. 31 October 2018. Archived from the original on 1 November 2018. Retrieved 31 October 2018.
  25. ^ "Чистая прибыль ВЭБа по РСБУ в 2018 г - 3,85 млрд руб после убытка годом ранее". ПРАЙМ (in Russian). 15 May 2019. Archived from the original on 26 May 2019. Retrieved 9 August 2019.
  26. ^ "Чистая прибыль группы ВЭБ.РФ за первый квартал составила 17,6 млрд рублей". ТАСС. Archived from the original on 2019-08-09. Retrieved 2019-08-09.
  27. ^ Ведомости (2019-06-10). "Как Шувалов за год изменил ВЭБ". Ведомости. Archived from the original on 2019-08-09. Retrieved 2019-08-09.
  28. ^ ""Акрон" привлек $1,7 млрд на свой крупнейший калийный проект". РБК. 6 June 2019. Archived from the original on 2019-08-29. Retrieved 2019-08-09.
  29. ^ "CONSOLIDATED LIST OF FINANCIAL SANCTIONS TARGETS IN THE UK" (PDF). 6 April 2022.
  30. ^ "Russia Sanctions Regulations 2022". Retrieved 11 February 2023.
  31. ^ "Что значат санкции США против ВЭБа — главного института развития в России". РБК (in Russian). 23 February 2022. Retrieved 2022-07-12.
  32. ^ "Remarks by President Biden Announcing Response to Russian Actions in Ukraine". The White House. 2022-02-22. Archived from the original on 2022-02-23. Retrieved 2022-02-22.
  33. ^ "U.S. Treasury Imposes Immediate Economic Costs in Response to Actions in the Donetsk and Luhansk Regions". U.S. Department of the Treasury. Archived from the original on 2022-02-23. Retrieved 2022-02-23.
  34. ^ "Сингапур ввел санкции в отношении банков ВТБ, "Россия", Промсвязьбанк и ВЭБ.РФ - ТАСС". tass.ru. Retrieved 2022-07-12.
  35. ^ "Igor Shuvalov appointed Vnesheconombank Chairman". President of Russia. 24 May 2018. Archived from the original on 2019-08-14. Retrieved 2019-08-07.
  36. ^ "About us". veb.ru. Archived from the original on 2019-08-05. Retrieved 2019-08-07.
  37. ^ "Business networking area partners". forumvostok.ru. Retrieved 2019-08-07.
  38. ^ "Exhibit A to Registration Statement Washington" (PDF). Archived (PDF) from the original on 2019-08-07. Retrieved 2019-08-07.
  39. ^ Lia. "ANDREY KOSTIN". www.finnews.am. Archived from the original on 2019-08-07. Retrieved 2019-08-07.
  40. ^ "Sergei Gorkov appointed to chair board at Vnesheconombank". Банки.ру. Archived from the original on 2020-05-26. Retrieved 2019-08-07.
  41. ^ "President of Russia". en.special.kremlin.ru. Archived from the original on 2019-08-07. Retrieved 2019-08-07.
edit

55°46′19.03″N 37°38′41.27″E / 55.7719528°N 37.6447972°E / 55.7719528; 37.6447972

Retrieved from "https://en.wikipedia.org/w/index.php?title=VEB.RF&oldid=1251198703"