Russia's state-owned VTB Bank plans to expand its presence in China by opening offices in Beijing and other cities in the near future, the lender's CEO Andrey Kostin said on Thursday at a meeting with a Russian governor.

Russia's largest banks rushed to establish footholds in China after Western sanctions in response to Moscow despatching its army to Ukraine in February 2022 effectively cut lenders off from the global financial system.

"Russia is now seriously expanding its foreign economic activity to the East," Kostin told Oleg Kozhemyako, governor of Primorsky Krai, which borders China, during their broadcast meeting. "The bank (VTB) has always been a leader in working in foreign markets."

"We are opening offices in Beijing and in a number of other Chinese cities in the near future. We have a licence to work with roubles and yuan, (and) we serve a certain flow of foreign trade turnover today."

VTB, Russia's second-largest lender, was the first to launch money transfers to China in yuan in September 2022, bypassing the international messaging system SWIFT. It first opened a branch in China more than 15 years ago.

Trade between the two countries ballooned to a record $240 billion in 2023. But Bloomberg reported last month that Chinese state owned banks had begun tightening curbs on funding to Russian clients for fear of secondary U.S. sanctions.

Last year Sberbank and Alfa Bank, Russia's biggest bank and its largest private lender respectively, also announced plans to open branches in China. (Reporting by Elena Fabrichnaya; Writing by Lucy Papachristou; Editing by Alexander Marrow and Jan Harvey)