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VTB CEO says Russian banks are ready to restructure some Russian Railways debt

BY Reuters | ECONOMIC | 12/01/25 03:30 AM EST

MOSCOW, Dec 1 (Reuters) - Russian banks are ready to restructure some Russian Railways debt as long as the central bank does not increase reserve requirements for these loans, VTB CEO Andrei Kostin told Reuters in an interview.

Russia's government is discussing different ways to prop up Russian Railways, the country's biggest commercial employer, which has built up a 4 trillion rouble ($50.8 billion) debt pile, Reuters reported on Nov. 25.

VTB, Russia's second largest bank, is Russian Railways' biggest creditor, and the bank's top managers are taking part in weekly discussions in the government on how to deal with the debt. Central bank officials are also participating in these meetings.

"Banks are ready to restructure loans and defer payments, provided that the central bank does not increase reserve requirements for these loans," Kostin said. (Reporting by Gleb Bryanski and Elena Fabrichnaya; editing by Guy Faulconbridge)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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