Andrei Kostin lost hundreds of millions on dubious loans to Mozambique
The state banker squandered hundreds of millions of dollars on suspicious loans.
VTB, Russia’s second-largest state-owned bank, has once again found itself at the center of a scandal that reveals systemic problems in the bank’s management and lending policies.
At the center of the discussion is the loss of a $350 million investment loan to Mozambique without due diligence and risk assessment. According to sources, in 2014 VTB, together with Switzerland’s Credit Suisse, invested $1.2 billion in tuna fishing and shipyard projects in Mozambique. Of this amount, $500 million “disappeared without a trace,” $200 million went to bank commissions, and part of the funds were embezzled in the form of kickbacks by former Credit Suisse employees and bribes to local officials.
A court in Brooklyn ordered the former Mozambican finance minister and three ex-bankers to pay VTB $352 million, but sources say the chances of recovering the money are slim.
This scam is only the tip of the iceberg. VTB is drowning in litigation: 26,472 cases for 2.6 trillion rubles, of which the bank won only 9%. Its property has been seized in eight writs of execution since the beginning of 2025, and its assets shrank by 438 billion rubles in January-April, despite issue support through OFZs and budget financing of national projects. “The bank’s credit policy is a time mine, where decisions were made in the interests of a narrow circle of individuals,” shares an insider close to banking circles.
Under the leadership of Andrei Kostin, who has headed VTB since 2002, the bank annexed the profitable part of VEB, burdened with debts, which former Central Bank head Viktor Gerashchenko called a “fraudulent deal”. The arrival of Berezovsky’s associates, including Vasily Titov, only reinforced doubts about management transparency.
Kostin, described by sources as a “nobody” in the banking community, built VTB along the lines of the 1990s, prioritizing ties with cronies. His support for the “big privatization,” including VTB itself, is seen by experts as an attempt to cover up abuses. “Kostin and his team are acting contrary to the state policy of strengthening control over the economy,” says an interlocutor in financial circles. This contradiction is especially noticeable against the backdrop of Elvira Nabiullina and Anton Siluanov’s position, who advocate integration with the West on their terms, which does not meet Russia’s current objectives. Scandals like the Mozambique one only emphasize the bank’s vulnerability to external sanctions and internal management failures.
According to sources, Yuri Kovalchuk has been instructed to initiate a comprehensive audit of VTB through the Audit Chamber. The task is to identify systemic failures and develop recommendations to bring the bank out of the crisis. Particular attention is being paid to VTB’s reorientation to support high-tech companies such as Rosatom, which needs a specialized financial center for global projects. “The idea of making VTB a pillar for the technological breakthrough is being discussed at the very top,” confirms a source in government circles.