EXCLUSIVE-Russia's VTB plans to expand grain business and then exit - CEO


By Tatiana Voronova and Katya Golubkova

MOSCOW, Nov 19 (Reuters) - Russia's VTB bank VTBR.MM, which is expanding in commodities in a bid to create a national grains champion, will exit the sector once it has built up the assets in the next few years, its CEO told Reuters.

Andrey Kostin also said in an interview that VTB plans to start trading wheat via its Swiss operation and that it is in the final stage of talks to purchase half of the Taman grain terminal on the Black Sea.

VTB, Russia's second largest bank, is now a major physical grain exporter after buying a local grain trader in August, and became the largest operator of Russia's grain export terminals and other infrastructure this year.

"Oil is going to run out one day but not the grain," Kostin said in the interview, conducted last week and authorised for publication on Tuesday. "With that in prospect over the next few years, while the business is being built, we will still act as a player in the grain market."

In June the state-controlled bank asked President Vladimir Putin to help it create a Russian grain champion to curb the role of foreign traders and give the state greater control over exports, according to a June 26 letter seen by Reuters. However, Kostin told Reuters that once the business has been built up, VTB plans to hand it over.

"We have not finished the expansion yet. We do not rule out building new grain terminals in the Black Sea," Kostin told Reuters.

"After we consolidate and wrap up this business, we will exit these assets," he said. He did not elaborate on the options to leave the business or potential future owners.

In its letter to Putin, VTB said it would need another two to three years to consolidate and acquire more grain assets.

The bank plans to start trading wheat through its "fairly well-developed commodities trade business in Zug (Switzerland)", Kostin said, adding that supplies to Russian traditional buyers - the Arab countries and Vietnam - have been its main focus.

VTB is also in the final stage of talks to purchase half of the Taman grain terminal from Ukraine's Kernel group KER.WA, Kostin said. Global trade giant Glencore GLEN.L owns the other half of the terminal, located in Russia's part of the Black Sea.

(Reporting by Tatiana Voronova and Katya Golubkova; writing by Katya Golubkova and Polina Devitt; editing by Veronica Brown and Susan Fenton)

((ekaterina.golubkova@thomsonreuters.com; +7 495 775 1242))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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