By Jason Corcoran in Moscow
VTB Capital has spent “significantly less” than the $500m earmarked to build the business and had already repaid the original capital back to the parent, according to its global chief executive Yuri Soloviev.
Soloviev was brought on board from Deutsche Bank, where he had been first deputy chariman of the German bank in Russia. He helped orchestrate the exodus of over 100 bankers to VTB, which left the German bank in Moscow reeling.
The hiring was done in waves, with the senior people moving following Soloviev within a day or two, followed later by their more junior bankers. Even the entire Deutsche press and marketing team decamped to VTB.
Moscow’s rumour mill went into overdrive with speculation that junior analysts were being rewarded with seven figure packages.
However, Soloviev denies the bank paid over the odds and says most people were offered market rates and that expectations have fallen since the crisis. “We are still going for a talent and we have made a number of successful hires. We didn’t have to write open cheques as expectations about wages and guarantees fell.”
Soliviev is keen to highlight other subsequent recruits from Renaissance, Troika, UBS although admits that just under 20% of VTB Capital 500-plus personnel are ex-Deutsche colleagues.
The original plan hatched by VTB group chief executive Andrei Kostin was to build a corporate finance bank centered on Moscow Narodny Bank, the state-owned London bank which had a presence in international debt markets. The idea mushroomed into a full service investment bank and Julia Chupina was hired from consultants McKinsey to devise a strategy.
When unsuccessful multiple-billion dollar approaches were made to Troika Dialog and Rencap, Kostin decided to it would be cheaper to hire a team from another bank and build an investment bank from scratch.
VTB Capital hasn’t been averse to cutting numbers during the crisis. A freeze on hiring has only recently been lifted and staffing was cut in a number of areas earlier in the year. Personnel in VTB’s Singapore hub was slashed from 73 to 25 while the loan syndication team was axed, along with prominent hires such head of global markets Steve Thunem and head of loan syndications James Nisbet.
Soloviev said made massive savings have been made by cutting out unnecessary use of taxis, external data subscriptions and blackberries.
Hiring is now back on in earnest and VTB has recently hired a three-man M&A oil and gas team from Dresdner Kleinwort, a sales team from ING and a pair of Morgan Stanley bankers.
The VTB Capital team will shortly move into VTB’s new offices in the emerging business district of Moscow City. Relocation by the entire group into the Mirax-owned Federation Tower was postponed last year following the crisis.
The bank has also kept up its international expansion, setting up a Dubai office in June 2009, and plotting the establishment of other offices in New York and Hong Kong.
