Russia's central bank cut its key interest rate once again on Monday, in a further bid to stimulate economic growth in the country. In a statement, the bank said it was, "taking account of lower inflation risks and persistent risks of considerable economy cooling."
Read MoreRussian central bank cuts key interest rate to 11.5%
While he would like to see a faster reduction of rates, Kostin said he was aware of the reasons behind a slower cut, with inflation sticky at 15.8 percent, although the rate is heading in the right direction with the rate slowing for the second month in a row in May.
VTB believed the inflation rate would fall to around 11 percent this year but could go down to five or six percent next year. Despite putting a brave face on higher interest rates, VTB's first-quarter earnings showed that higher interest and the accompanying borrowing slump have hit earnings. The bank made a net loss of 18.3 billion rubles ($344.5 million) in the first quarter.
Kostin conceded that the interest rate had discouraged customers but said things were not as bad as previously thought.
"At the beginning of the year, we thought we'd have big losses for this year due to the expense of funding but now our forecast is about zero profitability which is a much better forecast than we had at the start of the year."
With interest rates at 11.5 percent, Kostin believed that the process of growth in corporate lending would start in the second half of 2015. In addition to a slump in oil prices and plunge in the ruble, Russia has also had to contend with the fallout of international sanctions placed on
Russia for its annexation of Crimea and role in the pro-Russian uprising in east Ukraine last year.
Financial institutions have taken a big hit with banks, such as the majority state-owned VTB, cut off from international financing and western firms reluctant to touch Russian assets.
The Russian government has stepped in to bail out major banks as a result, with VTB set to receive a $2.5 billion bailout. VTB said on its website it had received the first tranche of 100 billion rubles "that the Government plans to provide to increase VTB's capital and for loans to businesses" in December and the rest was expected before the end of the first quarter of 2015.
Read MoreRussia: Time to invest despite sanctions threat?
Kostin said VTB had not yet received the funding help from the Russian government but was "in the process of doing so" and said the bank had liquidity enough to extend loans.
"From the point of view of losses, we left the worst of them behind us last year. We very much believe we will have a much better year next year and we are now working on our new strategy which will be very much domestically-orientated."