* VTB to develop grain business for next 3-5 years - CEO

* Has no plans to cut stake in grain unit further - CEO

* Wants closer cooperation with Yandex

* Full Kostin quotes in Russian

MOSCOW, Oct 28 (Reuters) - Russia's VTB bank, which has transformed itself into a major grain trader within a year, plans to remain in the grain business for the next three to five years, Andrey Kostin, the chief executive of the state-controlled lender, told Reuters.

VTB, Russia's second biggest bank, has become the largest operator of domestic grain infrastructure after it snapped up a number of assets last year. In April, it sold nearly a half of its grain unit, the Demetra Holding, to two other Russian firms.

"I believe that we will be in this project for the next three to five years, more likely five," Kostin said in remarks cleared for publication on Wednesday. "A lot needs to be done to develop the grain market's infrastructure."

Russia is one of the world's largest wheat exporters. A year ago, VTB told Reuters that it planned to expand its grain business and then exit it.

Asked what else VTB needed to do, Kostin said that grain infrastructure, such as roads and railway hubs, needed to be improved and that the bank was also looking to strengthen its grains team further.

"All these things are in our focus, as well as external market developments where we are more and more actively trying to enter with our Russian grain," Kostin said.

YANDEX AND AEROFLOT

Asked whether the bank was looking for closer ties with Russia's top search engine Yandex, in which VTB had a minority stake, Kostin said:

"We'd like that. But it is important for our partners to have the same desire too... We are of course interested in full-scale partnership."

VTB became a minority shareholder in Yandex this year after the company raised funds to buy out another state bank, Sberbank , from their former joint marketplace Yandex.Market.

The deal was part of a divorce with Sberbank after Yandex and Russia's top bank failed to agree on a strategy for their joint assets.

Kostin, asked whether VTB and Yandex should consider joint banking services, said:

"I believe that they (Yandex) need to develop financial services, but how and with whom - this question needs deep study."

VTB, with other investors, also bought into the secondary share offering of Aeroflot, Russia's top airline. That was part of the state's effort to support the flagship carrier which has been hard hit by a slump in travel caused by the coronavirus pandemic.

Kostin said that VTB directly bought 5 billion roubles ($66 million) worth of Aeroflot shares and planned to keep this stake until after the airline's share price increases. He did say when he expected that to happen. Aeroflot raised a total of 80 billion roubles.

($1 = 76.2604 roubles) (Reporting by Tatiana Voronova and Katya Golubkova Editing by Tomasz Janowski)