The board of Russia’s second-largest bank state controlled VTB recommended paying out RUB275.8bn ($2.97bn) in total dividends for 2024, according to Interfax corporate disclosure portal.
As followed by bne IntelliNews, due to persistent capital pressures, VTB was not expected to pay dividends for 2024 IFRS profit of RUB551bn.
The surprise dividend announcement makes 50% of IFRS profit for 2024, implying RUB25.58 ($0.28) payout per ordinary share, equivalent to 26% of the current share price, Renaissance Capital analysts commented.
The decision contradicts prior consensus expectations that VTB would retain a larger share of earnings to support capital buffers. As of end-1Q25, VTB’s capital adequacy ratios stood at only 6.40% (N20.1) and 9.90% (N20.0), with a minor increase in regulatory minimums scheduled for July.
The dividend payout is expected to reduce capital adequacy by 1.1pp, but the bank plans to replenish buffers through retained earnings, moderate loan growth, asset sales, and possibly a new share issue, RenCap analysts commented.
As a reminder, in 2025 the bank’s management pledged to get rid of non-core assets. VTB has for years been called upon for bailing out troubled industrial majors, such as the United Shipbuilding Corporation (USC or OSK). However, in the first signs of a possible shift of policy, this year the bank called off a deal to acquire major shipyard Zvezda.
Most recently the bank contined to post strong profitability in 1Q25, but it was underpinned by one-off factors such as gains on financial instruments.
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