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Native name
Vneshtorgbank of the USSR
State Corporation
IndustryFinancial services
Founded18 August 1922; 96 years ago (1922-08-18).[1][2]
FounderOlof Aschberg[2]
Key people
Igor Shuvalov (chairman)
Revenue$4.53 billion[3] (2017)
-$2.85 billion[3] (2017)
-$4.93 billion[3] (2017)
Total assets₽3.47 trillion[4] (30 June 2018)
Total equity₽359 billion[4] (30 June 2018)
OwnerRussian Government
RatingBa1 (Moody's)[5]

Vnesheconombank, or VEB (Russian: Внешэкономбанк (ВЭБ)), is a Russian government-owned development bank, meant to provide funding for projects aimed at developing the Russian economy. It is not involved in retail banking activities.[6]

Translated to English, its name means "Bank of Foreign Economic Activity," though it is commonly called the "Russian Development Bank," and it refers to itself as "the state corporation Bank for Development and Foreign Economic Affairs.”


The Russian government uses VEB to support and develop the Russian economy and to manage Russian state debts and pension funds. It is a part in the government's plan to diversify the Russian economy,[7] and to do so receives funds directly from the federal state budget.[8]

The bank has been used to fund industrial and infrastructure projects, as well as off-budget spending on government projects such as the 2014 Sochi Winter Olympics.[9] Another one of its unofficial functions has been to act as a rescue fund for failing businesses.[9]


Early history[edit]

In 1922, Swedish financier Olof Aschberg established the Soviet Union's first international bank, Roskombank (Роскомбанк; "Russian Commercial Bank").

In 1924, the bank was renamed Vneshtorgbank (Внешторгбанк; "Foreign Trade Bank of the USSR"), a joint stock bank. It was renamed Vnesheconombank ("Bank for Foreign Economic Affairs of the USSR") in 1988.[2]

Post-Soviet history[edit]

In 2002, Vnesheconombank was restructured and it stepped up its efforts in servicing government programs, reduced the scope of its commercial business and gave a higher priority to supporting the government's structural reforms.[2]

In April 2002, VEB was appointed Vnesheconombank agent for investing temporarily free Pension Fund's assets in securities denominated in foreign currency, and in January 2003, a special structural subdivision to handle pension funds was formed; VEB was appointed the "State Trust Management Company" responsible for investing Russia's pension funds.[2]

From 2005 to 2006, both the assets and liabilities of the bank doubled from around $6 billion to $12 billion, and the income rose from $239 million to $301 million.[10]

In April 2007, Russia's State Duma passed the federal law "On Bank for Development," which regulated VEB's legal conditions and made it a state bank.[11][12] Vladimir Putin increased lending when he became the bank's chairman in 2008.[7]

Due to lax internal oversights and poor risk management, by late 2009 VEB quadrupled its assets to nearly 2 trillion rubles ($65 billion).[13] By 2009, VEB was seen by the government as an off-budget fund, used to put off budget expenses.[13]

In July 2014, the United States Department of the Treasury imposed economic sanctions that prohibited U.S. persons from providing doing business with VEB after the 2014 pro-Russian unrest in Ukraine.[14] Between 2014 and 2017, the Russian Ministry of Finance spent $10 billion on the bank.[7]

VEB has suffered massive losses in 2014-2015, leading to a 330 billion rubles government bailout in 2015,[15] followed by 150 billion rubles in 2016 and a similar amount planned for 2017.[16][17] VEB was the main lender for the 2014 Winter Olympics, and many of the loans originating from the games missed original returns forecasts, or had to be restructured.[18]

In March 2016, the bank was promised a $2.2 billion bailout from the Russian government.[19] Sergey Gorkov, a former senior executive at Sberbank, was appointed to lead VEB and come up with a turnaround strategy, which included the sale of non-core assets.[20] The government originally offered the position to German Gref, who turned down the job.[13]

In March 2017, Ukraine imposed sanctions on Vnesheconombank (and other Russian state-owned banks operating in Ukraine: Sberbank, VTB Bank, VS Bank, Prominvestbank, and BM Bank) as part of its continued sanctions on Russia for its annexation of Crimea and involvement in the War in Donbass.[21][22][23] After that, the bank tried to sell its Ukrainian subsidiary; as of August 2017 unsuccessfully.[21] At Sochi in February, 2018, Vnesheconombank's Sergey Gorkov said they hoped to sell its Ukrainian subsidiary, Prominvestbank, by May 2018.[24]

In 2017, the bank's debt was $17 billion, including $14.2 billion in Ukraine.[7] In January 2017, Gorkov released the bank's "Strategy 2021," which predicted relief from sanctions, resuming borrowing in the United States, and shifting risks to the government's budget.[7] According to a report the New York Times published in May 2017, 40% of the bank's loans were at risk of default.[7]

In May 2018, Igor Shuvalov replaced Gorkov as VEB’s new chairman.[25] In July 2018, the bank requested a further $16 billion bailout from the Russian government.[25] In October 2018 the bank announced plans to rebrand, changing its denomination into 'National Development Institute', and confirming it would be granted 600 billion rubles ($9.1 billion) in subsidies from the federal budget by 2024, in addition to the 125 billion rubles received in 2018.[26]


By law, the Prime Minister of Russia is the chairman of the bank's board.[7]

Alleged Trump links[edit]

In 2010, the bank's director visited the United States Chamber of Commerce to announce an agreement with the Export–Import Bank of the United States.[7] In 2013, a VEB subsidiary acquired Boeing 777s it then leased to Aeroflot in a $500 million deal guaranteed by the U.S. Export-Import Bank.[7] In 2014, the U.S. Export-Import Bank guaranteed a similar $700 million deal.[7]

In 2010, Alex Shnaider sold half of his ownership in the Zaporizhstal steel mill to buyers financed by VEB, who were then themselves acquired by VEB.[7] Shnaider used proceeds from the sale to partly meet cost overruns at his Toronto Trump Tower.[7]

In 2016, Evgeny Buryakov, who posed as a banker in VEB's Manhattan office and who attempted to recruit Trump advisor Carter Page, pleaded guilty in U.S. district court to having acted as a secret agent of the Russian Foreign Intelligence Service.[7][28] Buryakov's lawyers were paid by VEB.[7]

In December 2016 the current president of VEB, Sergey Gorkov, met with senior Trump advisor and son-in-law of President Trump Jared Kushner.[29][30]

See also[edit]


  1. ^ MacDonald, Scott B.; Lemco, Jonathan (2015). State Capitalism's Uncertain Future. ABC-CLIO. p. 85. ISBN 9781440831089. Retrieved 3 June 2017.
  2. ^ a b c d e "History". Vnesheconombank. Retrieved 3 June 2017.
  3. ^ a b c
  4. ^ a b "Промежуточная сокращенная консолидированная финансовая отчетность (30 июня 2018 г.)" (PDF). Vnesheconombank. Retrieved 28 October 2018.
  5. ^ "Moody's affirms Vnesheconombank's long-term ratings at Ba1". 12 December 2017. Retrieved 6 October 2018.
  6. ^ "About Vnesheconombank". Retrieved 23 March 2017.
  7. ^ a b c d e f g h i j k l m n o Protess, Ben; Kramer, Andrew E.; McIntire, Mike (5 June 2017). "Bank at Center of U.S. Inquiry Projects Russian 'Soft Power'". The New York Times. p. A1. Retrieved 5 June 2017.
  8. ^ da Costa, Pedro Nicolaci (June 26, 2017). "The Russian bank whose boss met with Jared Kushner keeps popping up as the Trump-Putin story unfolds". Business Insider. Retrieved November 1, 2017.
  9. ^ a b "Putin's Bailout Bank Needs a Rescue; It's an $18 Billion Whopper". Bloomberg L.P. 28 December 2015. Retrieved 12 April 2017.
  10. ^ ""VEB Annual Report 2006"" (PDF). Archived from the original (PDF) on 2010-12-01. Retrieved 2008-01-24.
  11. ^ "VEB Profile". VEB. Retrieved 29 November 2014.
  12. ^ "Law on bank for development" Archived 2008-02-25 at the Wayback Machine., VEB
  13. ^ a b c Hobson, Peter (3 March 2016). "How Putin's Bank Became Russia's $20 Billion Problem". The Moscow Times. Retrieved 6 October 2018.
  14. ^ U.S. Department of Treasury. "Announcement of Treasury Sanctions on Entities Within the Financial Services and Energy Sectors of Russia, Against Arms or Related Materiel Entities, and those Undermining Ukraine's Sovereignty" 16 July 2014.
  15. ^ "How bad is it really at Russia's VEB?". bne IntelliNews. Retrieved 12 April 2017.
  16. ^ "Russia's VEB chairman sees difficulties redeeming debt in 2017". Reuters. 10 November 2016. Retrieved 12 April 2017.
  17. ^ "Announcement of Treasury Sanctions on Entities Within the Financial Services and Energy Sectors of Russia, Against Arms or Related Materiel Entities, and those Undermining Ukraine's Sovereignty". United States Department of the Treasury. 16 July 2014. Retrieved 3 June 2017.
  18. ^ Voronova, Tatiana (19 December 2017). "Russia's VEB to transfer Globex to the state as it tackles Sochi..." Reuters. Retrieved 6 October 2018.
  19. ^ Kottasova, Ivana (30 March 2016). "The latest Russian bank bailout is not like all the rest". CNNMoney. Retrieved 27 June 2017.
  20. ^ "Kushner meeting shines spotlight on Russian bank". Financial Times. Retrieved 27 June 2017.
  21. ^ a b Ukraine blocks sale of subsidiaries of Russia's Sberbank, VEB – media, UNIAN (29 July 2017)
  22. ^ Пороше́нко, Петро́ Олексі́йович (March 15, 2017). "УКАЗ ПРЕЗИДЕНТА УКРАЇНИ №63/2017: Про рішення Ради національної безпеки і оборони України від 15 березня 2017 року Про застосування персональних спеціальних економічних та інших обмежувальних заходів (санкцій)"" [DECREE OF THE PRESIDENT OF UKRAINE No. 63/2017: On the decision of the Council of National Security and Defense of Ukraine dated March 15, 2017 "On the Application of Personal Special Economic and Other Restrictive Measures (Sanctions)"]. President of Ukraine website (in Ukrainian). Retrieved February 28, 2018.
  23. ^ Пороше́нко, Петро́ Олексі́йович (March 16, 2017). "Глава держави затвердив санкції щодо низки російських банків" [The head of state has approved sanctions against a number of Russian banks]. President of Ukraine website (in Ukrainian). Retrieved February 28, 2018.
  24. ^ Talant, Bermet (20 February 2018). "Russian state banks leaving Ukraine because of sanctions, attacks by nationalists". Kyiv Post. Retrieved 26 February 2018.
  25. ^ a b c Pismennaya, Evgenia (3 July 2018). "Putin's Sanctions-Hit VEB Is Said to Plan Appeal for $16 Billion". Bloomberg. Retrieved 6 October 2018.
  26. ^ "Russia's Vnesheconombank revamped into VEB.RF, to get up to $22bn support". BNE Intellinews. 31 October 2018.
  27. ^ Becker, Jo; Rosenberg, Matthew; Haberman, Maggie (March 27, 2017). "Senate Committee to Question Jared Kushner Over Meetings With Russians". New York Times. Retrieved March 28, 2017.
  28. ^ "Evgeny Buryakov Pleads Guilty In Manhattan Federal Court In Connection With Conspiracy To Work For Russian Intelligence". Department of Justice. March 11, 2016. Retrieved November 2, 2017.
  29. ^ Rosenberg, Matthew; Mazzetti, Mark; Haberman, Maggie (May 28, 2017). "Investigation Turns to Kushner's Motives in Meeting With a Putin Ally". The New York Times. Retrieved November 1, 2017.
  30. ^ Filipov, David; Brittain, Amy; Helderman, Rosalind S. (June 1, 2017). "Explanations for Kushner's meeting with head of Kremlin-linked bank don't match up". The Washington Post. Retrieved November 1, 2017.

External links[edit]

Coordinates: 55°46′19.03″N 37°38′41.27″E / 55.7719528°N 37.6447972°E / 55.7719528; 37.6447972