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Report: VEB eyes staff cuts ahead of state recapitalization

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Report: VEB eyes staff cuts ahead of state recapitalization

Vnesheconombank, which employed around 1,900 people in 2017, plans to reduce its workforce by between 40% and 50%, Kommersant reported June 2.

The Russian state-owned lender reportedly said that it has been changing its approach to business and distressed assets, and, as a result, some jobs could be made redundant.

In the longer term, the job cuts will also affect VEB's subsidiaries, with a more detailed plan to be put in place after completing the process at the parent company, the newspaper noted, citing a market source. The entire group, including its subsidiaries, employed 23,000 people in 2017, with the total personnel costs amounting to almost 30 billion rubles.

The planned staff reductions at the parent company would help VEB save between 2 billion rubles and 3 billion rubles per year, with the figure also including the costs of office space, maintenance and power supply. Further job cuts in Vnesheconombank's units could generate savings amounting to between 3 billion rubles and 5 billion rubles, according to Kommersant.

The bank needs to cut costs in order receive the capital boost promised by Prime Minister Dmitry Medvedev at the end of May, Kommersant said, adding that the financial institution hoped to get additional capital in the second quarter in the form of a 200 billion ruble deposit from the Russian Finance Ministry.

Separately, Vnesheconombank said June 1 it opened a representative office in Abu Dhabi. The office already received all necessary permits, a commercial license and a registration certificate, and is ready to operate, the lender added.

As of June 1, US$1 was equivalent to 62.15 Russian rubles.