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Demoted by Fitch VTB Bank Reduces Staff

Russian banks, including VTB represented in Georgia, arefacing problems.

Fitch Ratings downgraded the ratings of 30 Russian financial institutions, including state-owned banks. Ratings of VTB,Rosselkhozbank and Gazprombank, thus fell belowinvestment to “junk” BB + from  BBB- with a “negative” outlook; Sberbank and VEB’s ratings fell to BBB- to  BBBwith a “negative” outlook.

The state-owned “VTB Bank” refused from the services rendered by  Fitch agency in  2012 is concerned with  these estimates.

Vedomosti  was told at “VTB Bank”  that Fitch  team consists of  non-professionals focused on  t sensational material and PR.

They say in the Moody’s agency that  «VTB» rating is below sovereign.

In addition to the decrease in ratings, Russian banks have other problems as well – they reduce  branches and personnel overseas. According to Russian media reports, this trend will affect our country as well.

In December 2014, “VTB” announced about a 15% reduction on  salaries and staff.  In an interview with the Russian”Kommersant”, VTB first Deputy  President  Yuri Soloviev said that the bank was forced to respond by  reducing  trade in the public markets.

What impact will the current situation have on “VTB Bank Georgia”?

Economic expert Emzar Jgerenaya says that the Russian “VTB Bank’s” positions downgraded by   Fitch will not adversely affect “VTB” branch operating in the Georgian market. However, he notes that the bank might have a problem in terms of attracting investment.

According to him, when the general line of any company is in poor condition, this time it reduces the number of branches and staff. The expert says that it is a natural thing.

He says it is not clear why “VTB Bank Georgia” announces vacancies.

George Barkalia,   Vice President of “VTB Bank of Georgia”, says that the bank is fully regulated by the Georgian law and is under the supervision of the National Bank. Russian “VTB Bank” is regulated by the central bank  of Russia, Georgian “VTB” – by the National Bank of Georgia. Therefore, this will not have any impact on the Georgian “VTB”, “- says Barkalaia.

He notes that  the bank has very ambitious plans in Georgia. “In  2015 we are going to be in all cities  where we are not presenttoday”, – Barkalaia adds.

In his words, “VTB Bank Georgia” plans to open 10 branches in 2015, where a total of 100 people will work.