MOSCOW (Reuters) - Russian bank VTB VTBR.MM plans to cut costs by slimming down its operations in the European Union to focus on Frankfurt while keeping London as the base for its investment banking business, the bank's first deputy president said.

FILE PHOTO - The logo of VTB Group is seen through a window of Imperia Tower on a facade of the Federatsiya (Federation) Tower at the Moscow International Business Center also known as "Moskva-City", in Moscow, Russia, August 5, 2015. REUTERS/Maxim Zmeyev/File Photo

The reorganization of VTB’s European business would mean the three banking licenses it has in Austria, France and Germany would be merged into one held by its German bank, allowing VTB to significantly cut costs, Yuri Soloviev told Reuters.

Soloviev said VTB was not looking to leave Britain due to its decision last year to leave the European Union.

“London remains the international headquarters of our investment bank, VTB Capital. At the moment we are definitely not considering any reduction of our business or an exit,” Soloviev said in an interview in Moscow.

“If you take any Russian company on a roadshow, then absolutely the first center where you go remains London.”

VTB’s global ambitions took a hit when it was included in Western economic sanctions over the Ukraine conflict, while an economic crisis in Russia from 2014 dented profits.

Sources have told Reuters that VTB cut London staff in the wake of the sanctions as deal volumes fell off sharply and many of its Russian corporate clients were shut out of international capital markets.

“Over the past year or two we have re-evaluated our presence in Europe,” Soloviev said.

“We have reformatted our business model. Our main focus now is following Russian capital. We have developed a specialization in several countries, especially ones where global banks have pulled back. That’s some countries in Eastern Europe, Bulgaria, Serbia, former Yugoslavia in general.”

Among VTB Capital’s recent deals in Eastern Europe it sold Bulgaria’s leading telecoms operator Vivacom last year. In 2012 it placed a $750 million Eurobond for Serbia.

Soloviev said VTB was in discussions with the European Central Bank over a pan-European banking license.

INDIAN EXPANSION

Soloviev said VTB saw opportunities to expand its business in India after it helped finance the deal for a consortium led by Russian oil major Rosneft ROSN.MM to buy India's Essar Oil ESRO.CL.

“After the Essar transaction we have become one of the most well-known brands on the local market,” he said. “We have found a very interesting niche on the level of mezzanine capital and trade cooperation between Russia and India.”

VTB currently has deals in India in technology, media and telecoms (TMT) and is monitoring the real estate and metallurgy sectors, Soloviev said.

In Russia, Soloviev said VTB was capitalizing on a pickup in investor appetite for Russian debt by organizing one or two corporate Eurobond deals a week.

“Our companies are lining up, making the most of the moment when spreads are tight,” he said.

Soloviev said VTB was on track to hit its ambitious target of doubling net profit in 2017 and that the bank did not need any additional capital for now.