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Sanctioned Development Bank Sees Profits Tumble 70 Percent

Published: August 17, 2014 (Issue # 1824)



  • VEB's net profits fell to about 3 billion rubles ($83 million) in the first half of this year, compared to nearly 10 billion rubles ($278 million) in 2013.
    Photo: Wikimedia Commons

The net profit of sanctioned state development bank Vneshekonombank, or VEB, fell 70 percent in the first half of this year against 2013 levels, according to the bank's second-quarter report.

VEB's net profits fell to about 3 billion rubles ($83 million) in the first half of this year, compared to nearly 10 billion rubles ($278 million) in 2013.

The drop was linked to a 12.3 billion rubles ($342 million) loss from foreign currency operations and the revaluation of foreign currencies, according to the report.

VEB was struck by both United States and Europe Union sanctions in July as the West sought to pressure Russia into ceasing support of separatist rebels in eastern Ukraine. The measures effectively barred VEB from buying or selling equity or debt with a maturity period of longer than 90 days on Western capital markets.

The bank at the time said the sanctions would not have a significant impact on its operations.

Some economists argued that striking VEB would create a financial ripple effect, ultimately damaging far-flung corners of the Russian economy. Although often classified as a development bank, VEB is in effect a state corporation that funds infrastructure projects and supports Russian industry and small business.

In targeting VEB, the sanctions struck close to the top of Russia's chain of command: Prime Minister Dmitry Medvedev himself is chairman of VEB's supervisory board, whose other members include Russia's finance minister and economic development minister.

The apparent losses this year may also be the natural consequence of a strong first half in 2013, when, according to the report, the bank profited from "the revaluation of financial instruments and revenues from the sale of securities."





 


ALL ABOUT TOWN

Thursday, Oct. 2


The celebration of the bicentennial of the birth of Mikhail Lermontov continues with todays free exhibition in the citys Lermontov Library at 19 Liteiny Prospekt. Titled Under the Rustling Wings, the temporary exhibition will feature the costumes and scenery used in the 1917 production of Lermontovs play The Masquerade, which he wrote in 1835 when he was only 21 years old.



Friday, Oct. 3


Learn more about how to manage and evaluate employee performance during SPIBAs Human Resources Committee meeting this morning on Employee Assessment: Global and Local Trends. Starting at 9:30 a.m., the discussion will touch on such topics as the partnership between HR and business, reliable assessment strategies and more, with Tatiana Andrianova, the head of the SHL Russia and CIS branch in St. Petersburg, as the featured guest. Confirm your participation by Oct. 2 by emailing office@spiba.ru or calling 325 9091.


AmChams Procurement Committee Meeting is at 9 a.m. this morning in their office in the New St. Isaac Office Center on Ulitsa Yakubovicha.



Saturday, Oct. 4


Wine and cheese lovers will get their chance to revel during Scandinavia Country Club and Spas Wine Market Weekend. Going on today and tomorrow, wining diners can listen to live music, take part in culinary classes and, of course, sample a variety of fine wines from around the world. The cost of admission is 400 rubles ($10.30) for adults and 200 rubles ($5.15) for children.



Sunday, Oct. 5


Look for the latest fall fashions at the Autumn Market today in Freedom Anticafe at 7 Kazanskaya Ulitsa. The minimarket plans to offer clothes more flattering than the puffy jackets that are a staple of the citys cold-weather fashion, while offering the same amount of protection from the biting winds blowing off of the Baltic.



Monday, Oct. 6


SKA St. Petersburg, the citys KHL affiliate, welcomes Slovakian club HC Slovan in a match-up tonight at the Ice Palace near the Prospekt Bolshevikov metro station. The puck drops at 7:30 p.m. and tickets can be purchased on the clubs website or in person at either the arenas box office or the clubs merchandise store on Nevsky Prospekt.



Tuesday, Oct. 7


Learn more about Russias energy industry at the St. Petersburg Energy Forum that begins today and runs through Oct. 10. Attracting industry experts and political and business representatives, the forum plans to welcome more than 350 plus companies and their representatives to discuss the future of Russias largest economic sector.



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