Russian banking major, VTB, has posted a 1Q 2018 Net profit of RUB 55.5 bln under IFRS

The net result was more than double the RUB 27.6 bln net result posted for 1Q 2017, as net interest income rose 2.9% year on year to RUB 116.3 bln, net fee and commission income rose 11.2% year on year to RUB 21.9 bln, and operating income before provisions rose 5.1% year on year to RUB 152.6 bln.

The major driver of the net result was provisioning which was reduced by more than half from RUB 45.9 bln as of 1Q 2017 to RUB 20.7 bln as of 31 March 2018, as VTB determined its risk cost fell to 0.9% this year from 1.9% a year earlier.  VTB also noted a 2.9% year on year rise in its loans portfolio to RUB 116.3 bln, with its NPL ratio climbing over the quarter to 7.1%.

VTB Group Chairman, Andrey Kostin, in a statement, noted the financial position of Russia’s second largest lender, with VTBs total and Tier 1 capital adequacy ratios up over the quarter by 1 percentage point to 14.5% and 12.7%.

“VTB delivered an exceptional performance in the first quarter, thanks to strong core revenue generation, effective cost controls and stable asset quality. Our ROE for the quarter was 16%, and all key performance metrics are at or better than the target levels set out in our three-year strategy.”

Kostin also noted the focus on retail customers as paving the way to a stronger future performance.

“In line with our strategic drive to prioritise the growth of our retail business, VTB Group saw a strong inflow of consumer deposits, which rose by 5.5% during 1Q 2018. Retail lending also drove growth of the overall loan portfolio, up by 2.6% during the quarter. On the Corporate and Investment Banking side, VTB Capital continues to lead the way, maintaining its positions at the top of the league tables.”