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Russia’s VTB more than doubles first quarter net profit on lower provisions

Stock Markets1 hour ago (Apr 19, 2021 05:10AM ET)

(C) Reuters. Logos are on display outside a branch of VTB bank in Moscow

MOSCOW (Reuters) – Russia’s second-largest bank VTB more than doubled its net profit in the first quarter compared with a year ago as it cut provisions against non-performing loans, the state-run lender said on Monday.

VTB’s financial performance took a hit in 2020 from the need to increase provisions against bad loans but this year could bring some respite after the central bank said it did not see any debt-related problems in the Russian banking system.

VTB said it made 85.1 billion roubles ($1.12 billion) in first quarter net profit compared with 39.8 billion roubles in the same period a year ago.

The increase took place as VTB set aside 22.6 billion roubles in loan loss provisions in January-March, down from 45.1 billion roubles in the same period of 2020.

VTB’s shares underperformed the market after the results were published, falling 1.2% on the day, compared with a 0.2% decline in the benchmark MOEX index.

First-quarter results reflect VTB’s “robust operating performance as well as the post-pandemic economic recovery,” said Dmitry Pianov, the bank’s chief financial officer.

“These results fully confirm our guidance for the full year and put VTB firmly on track to deliver a solid return on equity going forward.”

VTB aims for a record income in 2021 of 250-270 billion roubles in 2021 after reporting a 63% decline in net profit last year as the COVID-19 pandemic triggered a hike in provisions against bad loans.

VTB’s cost of risk for the first three months of 2021 amounted to 0.7%, an 80 basis points decline compared to the same period of 2020.

VTB’s net interest income rose 21.6% year on year to 145.6 billion roubles in the first quarter.

($1 = 76.2400 roubles)

Russia’s VTB more than doubles first quarter net profit on lower provisions

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