VTB earns 30.2 bln rubles under IFRS in July, 201 bln rubles in seven months

MOSCOW. Aug 30 (Interfax) – VTB had net profit to International Financial Reporting Standards (IFRS) of 30.2 billion rubles in July and 200.9 billion rubles in 7M, the group said in a statement.

VTB’s return on equity (ROE) was 17.6% in July and 18.3% in 7M.

In July last year, VTB had token profit of 1.1 billion rubles due to increased costs on provisions. In 7M 2020, profit came to 43 billion rubles.

The bank previously improved its net profit forecast for 2021 to 295 billion rubles from the formerly expected range of 250-270 billion rubles.

"Our results for July and 7M affirm our guidance and establish a solid basis for successful results for the full year," member of the VTB management board Dmitry Pianov was quoted as saying in the statement.

The group’s net interest income grew 21% to 361 billion rubles in January-July. Net fee and commission income rose 36% in 7M, to 98.7 billion rubles.

"This basically corresponds to our annual target. We spoke about the fact that we expect net interest income to grow around 20% for the year, and as net interest income growth is preserved at around the same level in July, this confirms that our sensitivity to changes in the key rate remains low, even close to zero. The reduction of the net interest margin that we expect in H2 is rather due to competitive factors and not to the key rate trend," Pianov said.

Provision costs reduced to 9.2 billion rubles in July from 48.7 billion rubles a year previously. In 7M as a whole, the volume of created provisions totaled 63.5 billion rubles against 162.6 billion rubles in 7M last year. As a result, the cost of risk reduced to 0.8% from 2.2%.

"This, as such, reflects a fairly stable economic situation and post-pandemic recovery. Although the pandemic has still not finished, nevertheless, we are seeing economic recovery. We see this in our own customer base, in the statistical indicators that are published, and in the data of the government and the Central Bank. As such, this enables us to have a stable cost of risk," he said.

The group’s staff costs and administrative expenses grew 10.4% in July and 5.8% in 7M, coming to 158.9 billion rubles.

The group’s loan portfolio grew 2.4% in July and 7.2% from the start of the year, totaling 14.1 trillion rubles. According to the statement, retail lending continued to grow at a faster pace: by 1.6% in July and 12.6% in 7M.

The corporate credit portfolio grew 2.7% in the month and 5% from the start of the year.

Clients’ funds increased 4.1% in July and 16.5% from the start of the year, to 14.9 trillion rubles.

The financial result from assets supplementing the banking business came to 11.3 billion rubles. The volume of such assets on the group’s balance sheet as of the end of July is estimated at 598 billion rubles and includes long-term investments, non-banking digital assets, as well as assets received as part of debt settlement.