Published by Global Banking and Finance Review
Posted on December 1, 2025
3 min readLast updated: January 20, 2026
VTB is prepared to restructure Russian Railways' debt, provided central bank reserve requirements remain unchanged. A financial plan from Russian Railways is anticipated.
By Elena Fabrichnaya and Gleb Bryanski
MOSCOW, Dec 1 (Reuters) - Russian banks are ready to restructure some of Russian Railways' debt as long as the central bank does not increase reserve requirements for these loans, VTB CEO Andrei Kostin told Reuters in an interview.
Russia's government is discussing ways to prop up Russian Railways, the country's biggest commercial employer, which has built up a 4 trillion rouble ($50.8 billion) debt pile, Reuters reported on November 25.
VTB, Russia's second-largest bank, is Russian Railways' biggest creditor, and the bank's top managers are taking part in weekly discussions with the government on how to deal with the debt. Central bank officials are also participating in these meetings.
"Banks are ready to restructure loans and defer payments, provided that the central bank does not increase reserve requirements for these loans," Kostin said.
The central bank allowed banks to restructure loans for corporate borrowers starting in 2025 without demanding a corresponding increase in the banks' reserves, provided that the debt is serviced on time and the companies provide a three-year financial plan.
Russian Railways' creditors are now asking the central bank to extend this measure into the next year, Kostin said.
"The central bank has the ability to do this. It can maintain reserves at the current level and allow us, for example, to postpone interest payments for Russian Railways to a later date," he added.
Kostin said that Russian Railways' creditors rejected a proposal to convert 400 billion roubles of the company's debt into shares, an idea that was floated at the government's meetings.
"Debt conversion into shares is a very complex process for banks. The central bank is against such investments in non-core assets, and this is challenging for banks in terms of capital. The largest banks will not pursue conversion," Kostin said.
He said that high interest rates and Russian Railways' obligations to the state to maintain investments, especially when it comes to developing the railway network in the Far East and supporting loss-making cargo operations in some areas, were behind the monopoly's financial condition.
Kostin cited exports of Russian coal to China by rail as an example of a loss-making operation, suggesting that the coal be used to generate and supply power for data centers in Russia instead.
"There is no point in transporting coal to China at a loss when, for example, data centers, which need energy today, can be set up close to coal power stations. Cryptocurrencies can be mined, bitcoin, for instance," said Kostin.
The banks were now waiting for Russian Railways' financial plan, he said.
"The question is, what financial model will be presented by Russian Railways, and whether the company will be able to repay all this money in three or five years. This topic is currently being worked on," he said.
(Reporting by Gleb Bryanski and Elena Fabrichnaya; editing by Guy Faulconbridge and Susan Fenton)
Debt restructuring is a process in which a borrower and lender agree to alter the terms of an existing debt agreement, often to improve the borrower's financial situation.
Corporate bonds are debt securities issued by companies to raise capital, promising to pay back the principal along with interest to bondholders.
Financial stability refers to a condition in which the financial system operates effectively, maintaining confidence and preventing systemic risks that could lead to economic downturns.
Debt sustainability is the ability of a borrower to maintain current debt levels without requiring debt relief or accumulating additional debt to meet repayment obligations.
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