June 11, 2013, 01:31 / Finance

VTB has set an ambitious target for net profit

The retail business of VTB Group is going to receive 100 billion rubles in 2016. net profit - more than the entire VTB Group earned last year Natalia Biyanova Mikhail Zadornov wants to earn more for VTB in three years than the entire group now / M. Stulov / Vedomosti

“If there are no new crises in Russia, this strategy and a profit of 100 billion for the retail business of the VTB Group looks realistic,” says Gazprombank analyst Yuri Tulinov. If VTB 24 operates with a profitability of 25% for all these three years, then its profit in 2016 will exceed 100 billion rubles, he points out, emphasizing that in the last year VTB 24 managed to show profitability at 40%. “The main focus of the VTB Group’s retail business is on unsecured lending, and here it is important how much the bank will be able to expand its portfolio as the market becomes saturated without reducing risks,” he warns.

Vedomosti has at its disposal a draft strategy for the development of VTB Group's retail business for 2014–2016, according to which by 2016 retail should earn 100 billion rubles for VTB. net profit.

VTB Group is currently developing a development strategy for all its areas for 2014–2016, the supervisory board should approve it in July.

VTB 24 declined to comment. A VTB representative said it was “too early to talk about the group’s next strategy.”

Profit of 100 billion rubles. - this is more than the entire VTB Group earned in 2012 (90.6 billion rubles according to IFRS, of which 45 billion came from the retail business). This is an ambitious, but quite achievable task, says a source in the VTB Group.

Sberbank's profit in 2012 was 347 billion rubles, this is a record for the bank. It is difficult to identify the share of retail in it - in its reporting, the bank does not divide profits by business lines. Half of its liabilities come from retail deposits, for which the bank incurs interest expenses, but funds part of the corporate portfolio with them; in addition, Sber has a huge network, and the maintenance of branches, as a rule, is considered to be an expense of the retail business.

VTB 24 accounts for 85% of the group's total retail business, which also includes Leto Bank, the retail portfolios of the Bank of Moscow and Transcreditbank (TCB). This is not only an individual, but also a small business (in April it accounted for 16% of the VTB 24 loan portfolio).

VTB expects that the growth of its retail business will allow it to compensate for the slowdown in other sectors of the economy. In the next three years, “along with the slowdown in economic growth and the banking system, the share of retail will increase,” the document says.

The State Bank expects that by 2016 the retail lending market will grow from 7.7 trillion to 16.1 trillion rubles, the VTB Group's share in this market should be 18.5%, and in attracting household deposits - 12%.

The number of VTB private clients should reach 20 million people.

VTB considers credit cards and cash loans to be its key retail products. Therefore, the group assigns a special role to Leto Bank, which deals with unsecured lending: according to the strategy, it should have 1,000 points of sale, 7 million clients and a 20% share in the “mass customer” segment.

VTB 24 should attract 40–50% of wealthy clients and build “Russia’s first successful federal model of working with small businesses,” doubling its share in this market.

For the Bank of Moscow, the strategy provides for an increase in the retail lending market share by 1.8 times with “smart competition” with other retail banks of the group. The TKB network will be fully integrated - due to this and the opening of new branches, the VTB 24 + TKB network in 2016 will amount to 1,250 branches (VTB 24 had 690 last year).

The previous development strategy of the VTB Group until 2013 was called “Road to 15”: it aimed to increase the profitability of VTB’s corporate business to 15% and the share price to 15 kopecks. The main goal for shareholders is 15 kopecks. per share - is unlikely to be achieved this year: now shares are more than three times cheaper, but almost all other indicators have been exceeded (see sidebar).