Russia's second-largest bank said it has halted lending to Russian billionaire Oleg Deripaska following U.S. sanctions against the oligarch.
"Of course, we are not lending any new money to him, we are not having any operations with him," Andrei Kostin, the president of VTB Bank told CNBC's Geoff Cutmore.
He said the bank is waiting to see what the U.S. Office of Foreign Assets Control (OFAC), which administers economic sanctions, does next. The United States in April slapped sanctions on a group of Russians including Deripaska, who has since announced plans to quit his post as director of aluminum giant Rusal.
"With Rusal and others, we're waiting for the OFAC decisions, but we hope that the issue will be resolved because we are a big creditor to him so we need to return our money," he said, insisting that the bank's business would not be affected.
"The business with newly sanctioned institutions represents less than 2 percent of our assets so of course it will affect us to a certain extent but we still have to see what's going to happen with them as there's some discussion that they could be lifted for Rusal and some other companies. So we shall see, but at the moment it doesn't represent a huge problem for us," he said.
Deripaska quit the EN+ board (Rusal's parent company) a few days ago and said he would reduce his majority stake in the company to below 50 percent in a bid to reduce pressure on the company and its subsidiary — both of which were listed on the "oligarch-owned companies" list under the new U.S. sanctions.
He also said he would quit the board of Rusal, although on Monday the firm said it had not yet received a formal resignation, Reuters reported.
Deripaska's attempt to distance himself from those companies comes after the U.S. decision to impose sanctions on the aluminum firm and other companies in which the Russian billionaire is a major shareholder.
Speaking on oligarchs like Deripaska, Treasury Secretary Steven Mnuchin said in a damning statement in April that this was punishment for alleged Moscow meddling in the U.S. election and other "malign activity."
"Deripaska has said that he does not separate himself from the Russian state. He has also acknowledged possessing a Russian diplomatic passport, and claims to have represented the Russian government in other countries. Deripaska has been investigated for money laundering, and has been accused of threatening the lives of business rivals, illegally wiretapping a government official, and taking part in extortion and racketeering." U.S. Treasury sanctions announcement, April 6 2018.
Kostin was also placed on the latest sanctions list as a "Russian government official" although he denied that, telling CNBC it was "unfair."
"I'm listed as a senior government official, which I'm not. I'm the chairman of one of the leading commercial, internationally-listed banks, and the 'malign activity' that was mentioned included Ukraine, hacking and Syria or undermining American democracy, and I have nothing to do with this, of course. All the banking community around the world knows me as banker," he said.
He said he had no fear that he could be removed from the leadership of VTB as he was not a shareholder.
"I'm not an owner. If they want to do something to VTB, they'll have to deal with the 40 percent of foreign investors and the 60 percent of the Russian government. I own nothing of VTB, I have a very, very small part but this is a different case, Mr. Deripaska is facing the problem when he has to somehow step down not only as an executive but as a shareholder, an owner of the company," he said.
"But I don't think it's the end of the world if they find a solution. As far as I understand, Mr Deripaska agreed not to be the major shareholder for the sake of the company … So hopefully the issue can be resolved. Rusal is a well-known, international company with a substantial share of the aluminum market and hopefully it will continue to work."
Kostin added that he had not experienced any difficulties so far, despite the personal sanctions on him.
"At the moment I haven't seen any specific problems. Some people are saying that the reason I was on the list is because I was giving too many interviews to leading American TV channels like yourself," he said.