Profit of Russian VTB Bank down by 33% in 2M24

By bne IntelliNews March 28, 2024

Russia’s second-largest bank state-controlled VTB posted a 33% year-on-year decline in net IFRS profit to RUB61.3bn, according to a report by the bank. VTB still plans to receive more than RUB100bn net profit under IFRS for the first quarter of 2024. 

VTB Group posted record profit under IFRS of RUB432bn ($4.6bn) for 2023, with net profit of RUB56bn in 4Q23 alone. The group has also revised upwards its record loss for 2022, from RUB613bn to RUB668bn ($7.2bn). Despite record profit of 2023, VTB’s management still has no plans to offer shareholders dividends.

VTB's net interest income for the two months of 2024 decreased to RUB107bn, down by 3% y/y. Net fee and commission income rose to RUB33.4bn (up by 29% y/y). Net interest margin totalled 2.4%, compared to 3% in the same period last year.

The total gross loan portfolio stood at RUB21.9 trillion (up by 4.2%). Loans to corporate clients increased to RUB14.9 trillion (+6.1%), to individuals to RUB7 trillion (+0.4%).

At the same time the management of VTB Bank has reiterated the intention to offload and potentially sell sanctioned assets. The bank expects to finalise the sale of some of its blocked assets to a third-party counterparty in April 2024, the first deputy president and chairman of the management board of VTB Dmitry Pyanov said, as cited by Kommersant daily. 

He specified that the deal could involve “ tens of billions of rubles”. VTB previously estimated the volume of assets blocked as a result of sanctions at RUB900bn (including those of Financial Corporation Otkritie). 

To remind, the bank had a RUB300bn capital injections approved with the state’s stake in the VTB’s capital decreasing from 76.4% to 61.8% as a result of two additional share issues

In addition, VTB is involved in recapitalising troubled state infrastructure assets, such as the United Shipbuilding Corporation (USC or OSK).

In March 2024 VTB announced its medium-term strategy with a profitability target of 19%-20% and focus on the retail segment. VTB's net profit target is set at RUB435bn, RUB520bn and RUB650bn in 2024, 2025 and 2026 respectively. 

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