VTB not interested in buying Citi's consumer banking business for money, would only consider it for free - Kostin

*VLADIVOSTOK. Sept 6 (Interfax) - VTB is not interested in buying Citi's consumer banking and local commercial banking operations in Russia for money, and would only consider acquiring it for free, VTB chief Andrei Kostin told reporters at the Eastern Economic Forum.

"Only for free," he said when asked whether VTB was interested in Citigroup's assets.

"We seriously have such a fundamental position, it is even slightly at odds with the Central Bank's position, although we understand their position. We've been sidelined from the management of our overseas banks, which is billions of euros. And so we very actively supported the adoption of the presidential decree on the prohibition of free sale. Of course, there is demand for these banks, but it seems to us that the principle of reciprocity should come into pay here," Kostin said.

"We know that Western banks are interested in swaps. But it would be wrong just to pay some serious money and be left with nothing ourselves. Although formally the purchase of assets is not covered by the decree, we do generally believe that there is some parity of interests here, and we, of course, decided against buying long time ago, before the sanctions. That is, we looked closely at this, but more to gain insight. So no, we don't have plans," Kostin said.

Citigroup announced plans in April 2021 to withdraw from retail business in 14 countries, including Russia. In March 2022, after the special military operation in Ukraine began, the group expanded the scope of the sale of its business in Russia to include the SME business. Russian Citibank has stopped accepting new customers.

Alfa Bank, Raiffeisenbank and VTB were among those interested in the retail business - VTB made a non-binding legal proposal in August 2021 but its CFO, Dmitry Pianov, told Interfax in January this year that the bank no longer expected to buy Citi's retail business in Russia. Alfa-Bank also said it had lost interest.

The group did not abandon attempts to sell its consumer banking business in Russia after February 24, when the military operation in Ukraine began. According to the Financial Times, negotiations were held with several buyers, including Expobank, RESO-Garantiya insurance company and Rosbank .

At the end of the second quarter 2022, Citi's remaining exposure to Russia stood at $8.4 billion, of which approximately $1 billion was related to the consumer and local commercial banking businesses in Russia. In connection with the wind-down plan announced today, Citi expects to incur approximately $170 million in costs, primarily over the next 18 months, largely driven by restructuring, vendor termination fees and other related charges.

Russian President Vladimir Putin signed a decree at the beginning of August banning entities from unfriendly countries from selling shares in Russian banks until the end of 2022 except with his special permission. The restrictions may be extended by decision of the president.