Russian bank VTB holds off forecasts despite record 2021 profit

4:51 am Tuesday, February 22nd, 2022

By Elena Fabrichnaya

MOSCOW (Reuters) -Russian state bank VTB on Tuesday reported a record net profit of 327.4 billion roubles ($4.1 billion) in 2021, but said it would not give any forecasts until markets stabilise.

Collectively, Russian banks made a record 2.4 trillion roubles profit last year as a rebound from the coronavirus crisis revived loan growth and boosted interest in real estate assets, the central bank said last month.

However, VTB shares slumped 18.25% lower on Monday, underperforming the wider Russian market, amid fears that new Western sanctions in response to Moscow sending troops to two Russia-backed separatist regions in eastern Ukraine may target key financial institutions.

Russian stock indexes were hit after President Vladimir Putin recognised the independence of the regions, a move the West fears could presage a major war.

Shares in VTB, Russia’s second-largest bank by assets, were down 3.1% at 0843 GMT on Tuesday, after earlier touching their lowest level since March 2020.

VTB board member Dmitry Pyanov declined to comment on the bank’s dividend plans and gave no forecasts for the year ahead.

“The situation on the market now is very volatile, so we are refraining from financial forecasts for 2022,” Pyanov told reporters. “We plan to tell the market about our expectations and plans for 2022 after the market situation has stabilised.”

VTB’s fourth quarter net profit was 69.8 billion roubles, up from 16.2 billion roubles in October-December of 2020. Its full-year profit was up from 75.3 billion roubles in 2020.

The bank said its return on equity (RoE), a key measure of profitability, rose to 16.5% in 2021, while its cost of risk fell by 120 basis points to 0.7%.

Provisions against bad loans fell to 116 billion roubles from 249.8 billion roubles, VTB said, while its net interest margin declined to 3.7% in the fourth quarter, from 3.9% in July-September.

($1 = 79.7025 roubles)

(Reporting by Elena Fabrichnaya; Writing by Alexander Marrow; Editing by Andrey Ostroukh and Alexander Smith)