Vnesheconombank (VEB) has been granted $50 billion from the country's international reserves to extend loans to Russian companies and banks to help them meet their foreign liabilities amid the ongoing global financial crisis.
"Until the end of this year, we need to repay around $2.4 billion in foreign loans. I don't think that we will raise money on public capital markets this year, and therefore we have turned to VEB for debt refinancing," Kostin said.
The VTB chief executive said the bank also had to repay around $9 billion in 2009 and planned to use international loans and VEB's funds to repay its foreign liabilities.
The current global credit crunch started in the United States and quickly spread to Asia and Europe, leading to record losses on Russia's financial markets, rising interest rates, and a liquidity shortage.
Kostin also said that the VTB management board would soon consider cutting the bank's expenditures by 15-20% in the fourth quarter of 2008 and freezing them in 2009.
"So far, we have no plans to lay off staff, but we will not take any new staff on. We are also freezing expenditures, for example, spending on real estate," Kostin said.
