VTB doused the profit

VTB’s profit in the first quarter of 2014 decreased almost to zero. According to the report of the bank itself, net profit decreased by 40 times to 400 million rubles. The VTB report did not justify even the most pessimistic forecasts - as a result of its campaign on the exchange, 5 percent lower than the opening traded during the day.

VTB showed a decrease in net operating income due to the fact that he doubled the deductions to reserves from 22 billion to 47.6 billion rubles. At the same time, in the first quarter, the VTB group earned a record net percentage income due to the growth of lending volumes in the retail, corporate-investment and medium-sized business segments.

They affected the bank’s business and the slowdown of economic growth in Russia, and the political crisis in Ukraine. In the first three months of 2014, a net loss for operations with financial instruments and assets available for sale amounted to 3.9 billion rubles. Against the backdrop of the devaluation of Ukrainian hryvnias and instability in foreign exchange markets, a net loss of operations with foreign currencies reached 8.2 billion rubles.

Personnel and administrative expenses amounted to 52.8 billion rubles, increasing by 15.0% compared with 45.9 billion rubles. In the first quarter of 2013. The main reason for growth is the development of VTB retail business.

Herbert Moos

At the same time, Deputy Chairman of the Board of the Bank Herbert Moos said that VTB was not going to review the profit on profit for 2014. “The margin is stable, good growth in operating income. In general, with the exception of reserves and the influence of the crisis, we see that the group is developing stably, ”he said during a telephone conference.

In the past, 2013, VTB earned about 100 billion rubles, but this indicator was not easy. In the first nine months, only 46 billion managed to earn money - then deductions to reserves also influenced the financial result. In the fourth quarter, more than half of the annual profit was obtained only by getting rid of assets: VTB sold, inter alia, Luxoft and Tele2 shares.

It is unlikely to be able to repeat the success of 2013 and now - there are fewer non -core assets that are simply and painless for business to sell at the disposal of the group.

VTB - the second after Sberbank, the Russian bank is in terms of asset. The government belongs to 60.93% of the shares, despite talking about its further privatization, so far the state retains control.

In Russia, a VTB group of banks operates through a maternal company - VTB itself, and six subsidiaries, including VTB 24, the Bank of Moscow and Transcreditbank. Outside the VTB country, banks belong to the former republics of the USSR (two banks in Belarus and in Ukraine, banks in Armenia, Georgia, Azerbaijan and Kazakhstan), and in far abroad (in the largest countries of Europe, in China, India, Dubai, Singapore and even in Angola).

Central Office of VTB group

VTB is not just one of the largest Russian banks, it can be said, one of the foundations of the Russian financial system.

During the economic crisis, it was through VTB that many banks were organized, this scheme worked later - the Bank of Moscow got into the group after the resignation of Luzhkov, only at the first stage VTB paid 100 billion, and in total the operation of the “salvation” of the Bank of Moscow was estimated at half past three trillion rubles.

It is likely that the sudden disappearance of profit in the VTB report is a tribute to the need to enter the markets of European countries, there should be at least some Russian banks there to be present after some financial organizations were imposed.

But the “zeroing” of profit may also turn out to be a systematic phenomenon - and then it is just right to think about how stable the Russian financial system is.

After Elvira Nabiullina, the Russian Central Bank, after coming to it, began to “clean up” the market from small banks, the meaning of which was resolutely incomprehensible for the majority. It turned out that here and there, the heads of credit institutions withdrew billions of rubles from them, leaving depositors in a rather difficult situation.

Moreover, the Central Bank began to close not only small, but also quite solid organizations. This was not done too efficiently-the money is still withdrawn, so the depositors are forced to pay an agency for deposit insurance, the reserves of which, of course, are not infinite.

Experts already say that the goal of Nabiullina is to go afloat several dozen banks of more than eight hundreds that are registered today. A significant part of these small banks is really engaged in either “cashing”, the legalization of illegally obtained non -cash funds, or other matters that are poorly friends with the law.

But not in vain they say that corruption is one of the pillars of the Russian economy. If you deal with it, then something can turn out at all what was expected initially. The money that used to calmly pump through small banks will still find another loophole , which will be a little more expensive, but no less effective.

In general, operational income to reserves increased by 15%, the results are not bad. But the slowdown of economic growth in Russia and the crisis in Ukraine had a significant impact on the result - it was necessary to increase deductions to reserves, create a pillow of safety, said the financial director of VTBB Herbert Moos . Reserves completely reduced the profit to this indicator, he complains.

The share of non -working loans (NPL) in the loan portfolio increased to 5.8% as of March 31, 2014. From 4.7% to December 31, 2013, the ratio of the reserve under impairment to the total loan portfolio amounted to 5.9% for March 31, 2014, increasing from 5.5% at the beginning of the year. The level of coating of non -working loans reserves amounted to 101.0% as of March 31, 2014 compared with 115.5% for December 31, 2013, the cost of risk increased per quarter from 1.5 to 2.8%. At the same time, the expectation of losses, or the cost of risk on loans to individuals, increased sharply from 1.9 to 5.5%.

MOOS indicates that VTB in the first quarter wrote off 10 billion rubles. loans that were reserved by 100%. The growth of reserves mainly falls on retail loans, assets in Ukraine and corporate loans of Russian borrowers, he explained. The clean percentage margin of the bank decreased by 20 basic points to 4.5% compared to the IV quarter of 2013. However, its level a year ago was the same.

The bank called a decrease in moderate and associated it with an increase in the key rate of the Central Bank, an increase in the volume of highly liquid assets, as well as with a decrease in profitability on debt securities and retail loans, "which occurred as the group continued to optimize the level of risks taken."

In addition, the bank received a loss from financial instruments of 3.9 billion rubles, and against the background of the devaluation of Ukrainian hryvnias and the increase in the cost of currency swaps in the first quarter of 2014. Pure loss for operations with foreign currencies reached 8.2 billion rubles. The total loss of the bank from the Ukrainian crisis, taking into account the created reserves, the devaluation of the hryvnia and the revaluation of the papers, amounted to 18 billion rubles, Moos said.

Almost 0.5% of the VTB group assets are on Ukrainian borrowers who are associated with the state. VTB created 26 billion rubles. reserves for retail loans due to a difficult situation with consumer loans, as well as 14 billion rubles. on corporate loans. Another 6 billion rubles. I had to create on loans issued to Ukrainian borrowers, Moos said.

As the situation develops, we will either deform or dissolve reserves, says MOOS. In retail, the Gosbank is alarming the growth of problem loans, as well as the loom of some borrowed segments, he points out.

VTB shares by 12.25 Moscow time fell by 4.1%.