VTB Bank (“VTB or “the Bank”), the parent company of VTB Group (“the Group”), today publishes its unaudited consolidated IFRS results for October 2015 and ten months ended 31 October 2015.
Net profit in October 2015 was RUB 3.0 billion, further reducing the year-to-date net loss to RUB 7.9 billion;
The Group’s performance in October was supported by continued recovery of net interest margin (reaching 3.4% in October 2015 versus 3.2% in 3Q 2015 and 2.5% in 9M 2015) and healthy net fee and commission income (RUB 7.4 billion in October and RUB 61.4 billion in 10M 2015, up 34.5% and 22.1% year-on-year, respectively);
Net operating income before provisions was RUB 40.8 billion in October and RUB 344.5 billion in 10M 2015, down 10.3% and 12.9% year-on-year, respectively;
The Group’s total provision charges for impairment of debt financial assets and for impairment of other assets, credit related commitments and legal claims amounted to RUB 155.3 billion in 10M 2015, and RUB 18.4 billion in October, down 19.2% and 29.0% year-on-year, respectively. The decrease in provision charges resulted from conservative risk policies and tighter origination standards in 2015;
Cost of risk was 2.3% in October 2015 and 2.0% in 10M 2015, down from 3.8% in October 2014 and 2.9% in 10M 2014;
Staff costs and administrative expenses amounted to RUB 192.0 billion for 10M 2015 and RUB 19.1 billion in October, up 7.5% and 10.4% year-on-year, respectively. VTB Group costs continue to grow at a rate below CPI inflation, reflecting the implementation of various cost control initiatives across the Group;
The Group’s cost-to-income ratio in October 2015 improved further to 46.8% (versus 47.1% in 3Q 2015), due to a combination of stronger operating performance and strict cost controls.
Statement of Financial Position:
Total assets amounted to RUB 12,616 billion at 31 October 2015, up 3.5% in 10M 2015 and down 1.4% in October. Gross loans and advances to customers decreased 0.4% in October and grew 3.6% in 10M 2015. The slight decline of the loan book in October was primarily driven by the strengthening of the Russian Ruble against the US Dollar and Euro and the resulting devaluation of FX-denominated exposures. Gross loans to legal entities increased 4.9% year-to-date (down 0.5% in October), while gross loans to individuals decreased 0.9% year-to-date (up 0.2% in October);
The NPL ratio was 6.7% of total gross loans at 31 October 2015, down 10 bps from the end-September level;
NPL coverage ratio at 31 October 2015 remained at a comfortable level of 104.8% (30 September 2015: 104.7%);
Total customer deposits grew 2.4% in October and 29.0% in 10M 2015, and amounted to RUB 7,316 billion at 31 October 2015. In 10M 2015, deposits from legal entities grew by 34.8%, which was faster than the 19.7% increase in deposits from individuals. In October deposits of legal entities grew 4.3% while deposits of individuals declined by 0.9%, largely due to the effect of FX-adjustment;
The Group further reduced its reliance on wholesale funding, with the share of debt securities issued in total liabilities falling to 5.7% at 31 October 2015 (30 September 2015: 5.9%, 31 December 2014: 8.3%);
The adjusted loan-to-deposit ratio remained at a comfortable level of 105.0% as of 31 October 2015 (30 September 2015: 106.8%, 31 December 2014: 113.4%);
The Group’s capital base remains very strong, and its capital adequacy ratios improved further during October 2015. At 31 October 2015, Tier 1 CAR was 13.1% (30 September 2015: 12.9%), and Total CAR was 15.3% (30 September 2015: 15.2%).