A bank called the Bank for Foreign Economic Affairs of the USSR does not at first glance appear to have a very promising future. Even its chairman describes it as an ugly animal that probably has no equivalent anywhere in the world. All the same Andrei Kostin, boss of Vnesheconombank, as it is better known, has high hopes for it.
Although still 100% owned by the Russian government, Vnesheconombank is trying to carve out a role as a commercial bank with a trade finance and capital markets focus. This ambition will be advanced in July when the bank loses its role as the legal obligor for Russia's London Club debt. This has limited the bank's development, especially abroad, because of worries that the state's creditors could pursue Vnesheconombank's commercial assets.
"A new opportunity has been created by the restructuring of the London Club debt. Previously Vnesheconombank was made an obligor and this limited our ability to develop the bank especially overseas," says Kostin, a former diplomat, who served in the Soviet embassy in London in the late 1980s. He became chairman of Vnesheconombank in October 1996.
Vnesheconombank grew out of the Bank for Foreign Trade of the USSR set up in 1924.