VTB Capital International Chief Executive Officer Atanas Bostandjiev, who heads overseas operations at Russia’s biggest investment bank, will be leaving the company after three years.
Chief Financial Officer Nick Hutt has been appointed interim CEO of the unit, VTB Capital’s press office said in an e-mailed statement late yesterday.
VTB Capital International missed its profitability targets for the past five years, Bostandjiev said in an internal memo to Yuri Soloviev, deputy CEO of parent VTB Group, in November. Bostandjiev proposed shutting the equity derivatives, commodities and structured credit trading groups, cutting the client roster to 300 from about 1,000 and eliminating 231 of 556 jobs, according to the document.
Bostandjiev was hired by VTB Capital in May 2011 from Goldman Sachs Group Inc., (G) where he was a partner responsible for the firm’s emerging-market client business in Central and Eastern Europe, the Middle East and Africa. Before that, he held senior sales-management roles at Merrill Lynch & Co. in London.
VTB Group CEO Andrey Kostin, 57, encouraged by the Kremlin to expand into investment banking overseas before the financial crisis, pledged to spend $500 million building the division. The unit planned to invest “several hundred million euros” in the Balkans, Bostandjiev said in a 2012 interview.
Bulgaria’s central bank seized Corporate Commercial Bank AD, a lender partly owned by VTB Group, in June after it ran out of funds and stopped all operations. A unit of VTB also acquired an 80 percent stake in state-owned tobacco company Bulgartabac Holding AD in 2011.
Bostandjiev said in an e-mailed statement today his departure was “a planned decision” agreed with VTB Group.
“I will now be taking the invaluable experience which I have gained with the bank on to new roles and looking forward to pursuing new opportunities,” he said.
Investment banks in Moscow, led by VTB Capital, Sberbank CIB and JPMorgan Chase & Co. (JPM), have seen a 69 percent drop in fees this year through May 18, according to data from Freeman & Co., a New York-based consulting firm. VTB Capital, the biggest organizer of Russian equity and debt deals over the past three years, earned $101 million in fees in 2013, the most of any bank in Russia, the data show.
VTB plans to reduce payroll expenses in its corporate-investment banking group by 15 percent in 2014 and 2015, according to a presentation published on its website.
“Having successfully completed the investment stage of our development, we are now moving to boost monetization through greater focus on origination,” Alexei Yakovitsky, CEO of VTB Capital, wrote in an e-mailed statement yesterday.
The Russian debt and equity markets have been largely closed since the country annexed Crimea in March, sparking sanctions by the U.S. and European Union against companies and individuals close to President Vladimir Putin.
VTB Capital canceled its New York investor forum in April as relations with the U.S. deteriorated over the Ukrainian crisis. Kostin, a former Soviet diplomat in London, warned the same month that Russia is in a Cold War with the U.S. and Europe and all of its banks could face sanctions.