Interfax: Kostin calls Ukraine a bankrupt nation

MOSCOW. March 4 (Interfax) – Ukraine is already in a default, and the country’s financial sector cannot exist without foreign financing, VTB (MOEX: VTBR) CEO Andrei Kostin told reporters on Wednesday.

“Ukraine’s financial and banking sector is in an extremely difficult state. Ukraine is actually already a bankrupt nation and in a default, and without foreign aid and external [financing] from the IMF and other international institutions, the financial sector, including the banking sector, will not pull through,” Kostin said.

The longer foreign financing is postponed, the more difficult the situation will become, he said, adding that the IMF has not yet provided the necessary amount of funds.

“For me, the situation in Ukraine, as I see it, is essentially already a default,” Kostin noted. The Ukrainian banking sector is extremely undercapitalized, partly because of the sharp fall of the hryvnia, he added. “I think that Ukraine has very difficult years ahead as concerns restoring the financial and banking sector,” he said.

Discussing the IMF’s decision to provide Ukraine with financing, Kostin noted: “It is largely a political [decision], and key stakeholders, above all Western countries and the U.S., play a huge role here.”

“But as far as I know, IMF leadership itself, as well as the fund’s experts, are still trying to [ensure] that this program is in line with standards and requirements. It’s difficult to say how much the balance will be observed, but currently, money will probably not be allocated in the huge amounts that Ukraine wanted to get,” he said.

Kostin added that the formula for success in Ukraine is stabilizing the political regime, stopping the war in Donbas and smoothing out friendly relations and cooperation with Russia.