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VTB Group key figures for the nine months of 2007

 
21 December 2007

Moscow, December 21, 2007 - VTB, Russia's leading universal banking group, is pleased to confirm today its consolidated IFRS financial results for 9M2007 and publish full financial details showing performance during the third quarter of 2007.

By the end of September 30 2007, the VTB Group's total assets had increased by 41.7% to US$74,255 million. Total gross loan portfolio of the Group grew by 53.3% to US$46,345 million, with loans to individuals increasing by 2.2 times. Net interest income before provisions increased by 46.2% year-on-year to US$1,732 million, and net fee and commission income went up by 56.8% amounting to US$414 million. In the reporting period, operating income of the Group increased by 41.9% to US$2,570 million from US$1,811 million in the first nine months of 2006.  Net profit was US$1,051 million for the nine-month period ended September 30, 2007 compared to US $816 million for the same period last year.

Financial Highlights

Profit and Loss Account (as compared to 9M2006):

  • Interest income increased to US$3,643 million, up 41.2%;
  • Net interest income before provisions increased to US$1,732 million, up 46.2% or US$547 million;
  • Net fee and commission income increased to US$414 million, up 56.8% or US$150 million;
  • Consolidated net profit for 9M2007 amounted to US$1,051 million, up 28.8%, mostly due to the increase of the net interest income and net fee and commission fee.

Assets and Funding (as compared to December 31, 2006):

  • Total gross loans and advances to customers increased by 53.3% to US$46,345 million. Gross loans to individuals grew strongly by US$3,084 million or 121.8% and totaled US$5,617 million. The share of loans to individuals in the total gross loan portfolio increased to 12% by the end of June 2007 compared to 8% at the end of December 31, 2006. Corporate loan portfolio (gross) increased by 47.0% to US$40,728 million from US$27,702 at the end of 2006;
  • Securities portfolio totaled US$13,985 million as compared to US$8,957 million (including approximately 5% of shares of EADS);
  • Customer deposits increased to US$28,923 million, up 44.7%, with deposits of individuals up by 31.4% to US$9,630;
  • Wholesale funding (which includes debt securities issued, other borrowed funds and subordinated debt) increased by 10.5% to US$19,011 million.  The share of wholesale funding in total liabilities decreased to 32.6% from 37.9% in 2006.

Full financial information is now available on www.vtb.ru <http://www.vtb.ru/rus/web.html?s1=6337&l=2&t=37902>.

Comments:

Andrey Kostin, President-Chairman of the Management Board:

"We are pleased to announce a set of numbers that show continued out-performance, despite the tough Global market conditions.  We are well on track to hit our targets at year end and will face the challenges of 2008 with a solid and stable foundation."

Nikolai Tsekhomsky, Member of the Management Board and CFO:

"Having spent a huge amount of time and effort on the IPO process, our Q3 numbers show that we have not taken our eye off the ball in terms of the core business.  We are especially happy that the quality of our earnings has continued to increase, with the majority of the upside year to date coming from net interest income, fees and commissions."

Consolidated Balance Sheet (expressed in millions of US dollars)

30 September 2007

(unaudited)

31 December
2006

 

Assets

Cash and short-term funds

3,297

3,581

Mandatory cash balances with central banks

1,133

648

Financial assets at fair value through profit or loss

9,583

5,120

Financial assets pledged under repurchase
agreements and loaned financial assets

3,149

2,938

Due from other banks

6,452

6,813

Loans and advances to customers

45,025

29,262

Financial assets available-for-sale

1,239

888

Investments in associates

191

200

Investment securities held-to-maturity

14

11

Premises and equipment

1,566

1,422

Investment property

188

178

Intangible assets

479

455

Deferred tax asset

211

93

Other assets

1,728

794

Total assets

74,255

52,403

Liabilities

Due to other banks

9,245

7,587

Customer deposits

28,923

19,988

Other borrowed funds

5,714

4,468

Debt securities issued

12,130

11,565

Deferred tax liability

114

125

Other liabilities

1,070

509

Total liabilities before subordinated debt

57,196

44,242

Subordinated debt

1,167

1,169

Total liabilities

58,363

45,411

 

Equity

Share capital

3,084

2,500

Share premium

8,792

1,513

Treasury stock

(20)

-

Unrealized gain on financial assets available-for-sale
and cash flow hedge

62

154

Currency translation difference

580

352

Premises revaluation reserve

332

341

Retained earnings

2,674

1,744

Equity attributable to shareholders of the parent

15,504

6,604

Minority interest

388

388

Total equity

15,892

6,992

 

 

Total liabilities and equity

74,255

52,403

 


 

Consolidated Statements of Income (expressed in millions of US dollars)

For the three-month
period ended

For the nine-month
period ended

30 September

30 September

2007

2006

2007

2006

Interest income

1,408

942

3,643

2,580

Interest expense

   (680)

(551)

(1,911)

(1,395)

 

Net interest income

728

391

1,732

1,185

Provision charge for impairment

(215)

(188)

(355)

(373)

 

 

Net interest income after
provision impairment

513

203

1,377

812

 

 

Gains less losses arising from financial
assets at fair value through profit or loss

110

88

196

174

Net gains (losses) from
available-for-sale financial assets

(34)

-

(33)

119

Gains less losses arising
from dealing in foreign currencies

206

48

347

48

Foreign exchange translation gains less losses

107

26

134

253

Fee and commission income

168

121

468

303

Fee and commission expense

(21)

(18)

(54)

(39)

Share in income of associates

-

8

7

13

Income arising from non-banking activities

30

23

73

61

Other operating income

14

19

55

67

Net non-interest income

580

315

1,193

999

Operating income

1,093

518

2,570

1,811

 

Staff costs and administrative expenses

(480)

(306)

(1,289)

(883)

Expenses arising from non-banking activities

(20)

(17)

(47)

(50)

Profit from disposal of associates and subsidiaries

62

56

80

56

 

 

Profit before taxation

655

251

1,314

934

 

Income tax expense

(108)

(19)

(263)

(128)

 

Profit after taxation
from continuing operations

547

232

1,051

806

 

Profit from discontinued operations

-

8

-

10

 

Net profit

547

240

1,051

816

 

 

Net profit attributable to:

Shareholders of the parent

555

227

1,029

781

Minority interest

(8)

13

22

35

 


 

Consolidated Statements of Cash Flows (expressed in millions of US dollars)

For the nine-month period
ended 30 September

2007

2006

Cash flows from operating activities

Interest received

3,571

2,288

Interest paid

(1,871)

(1,321)

Income received on operations with financial assets
at fair value through profit or loss

145

111

Income received on dealing in foreign currency

203

73

Fees and commissions received

468

303

Fees and commissions paid

(70)

(37)

Income arising from non-banking activities
and other operating income received

106

128

Staff costs, administrative expenses and
expenses arising from non-banking activities paid

(1,196)

(921)

Income tax paid

(265)

(206)

Cash flows from operating activities before
changes in operating assets and liabilities

1,091

418

 

Net decrease (increase) in operating assets

Net increase in mandatory cash balances with central banks

(449)

(112)

Net decrease in restricted cash

11

8

Net (increase) decrease in financial assets at fair value through profit or loss

(4,655)

572

Net decrease (increase) in due from other banks

557

(1,339)

Net increase in loans and advances to customers

(15,078)

(6,751)

Net increase in other assets

(895)

(380)

Net (decrease) increase in operating liabilities

Net increase (decrease) in due to other banks

1,423

(183)

Net increase in customer deposits

7,989

6,504

Net decrease in promissory
notes and certificates of deposits issued

(576)

(430)

Net increase in other liabilities

184

130

Net cash used in operating activities

(10,398)

(1,563)

 

 

Cash flows from investing activities

Dividends received

22

27

Proceeds from sales or maturities of financial assets available-for-sale

690

616

Purchase of financial assets available-for-sale

(443)

(2,040)

Purchase of subsidiaries, net of cash acquired

(11)

(14)

Sale of disposal group held for sale

-

122

Acquisition of minority interest in subsidiaries

(50)

-

Disposal of associates

44

-

Disposal of subsidiaries, net of cash disposed

66

(16)

Purchase of associates

(10)

-

Purchase of investment securities held-to-maturity

(9)

-

Proceeds from redemption of investment securities held-to-maturity

6

2

Purchase of premises and equipment

(216)

(184)

Proceeds from sale of premises and equipment

30

32

Purchase of intangible assets

(12)

(2)

Proceeds from sale of intangible assets

-

6

Net cash from (used in) investing activities

107

(1,451)


 

For the nine-month period
ended 30 September

 

2007

2006

Cash flows from financing activities

Dividends paid

(133)

(63)

Proceeds from issuance of RUR denominated bonds

-

659

Redemption of RUR denominated bonds

(102)

(72)

Proceeds from issuance of Eurobonds

2,524

1,248

Redemption of Eurobonds

(1,300)

(350)

Proceeds from issuance of SSD debentures (Schuldscheindarlehen)

-

254

Redemption of SSD debentures (Schuldscheindarlehen)

(227)

(157)

Proceeds from syndicated loans

1,518

2,963

Repayment of syndicated loans

(595)

(1,210)

Proceeds from other borrowings

1,294

709

Repayment of other borrowings

(918)

(499)

Proceeds from share issue, less transaction costs

7,842

-

Cash paid for treasury stock

(20)

-

 

 

Net cash from financing activities

9,883

3,482

 

 

 

Effect of exchange rate changes on cash and cash equivalents

135

116

 

 

 

 

Net (decrease) increase in cash and cash equivalents

(273)

584

 

 

 

 

Cash and cash equivalents at beginning of the year

3,479

2,541

 

Cash and cash equivalents at the end of the period

3,206

3,125

 

 


Some of the information in this presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of JSC VTB Bank ("VTB") and its subsidiaries (together with VTB, the "Group"). Such forward-looking statements are based on numerous assumptions regarding the Group`s present and future business strategies and the environment in which the Group will operate in the future. We caution you that these statements are not guarantees of future performance and involve risks, uncertainties and other important factors that we cannot predict with certainty. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecasted in the forward-looking statements. These forward-looking statements speak only as at the date of this presentation and are subject to change without notice. We do not intend to update these statements to make them conform with actual results.

Contacts:

Nataly Loginova
Elena Ershova
Irina Mokeeva
Telephone:
+7 (495) 739-77-99
8-800-200-77-99 (toll free number for Russian regions)
E-mail: InvestorRelations@vtb.ru


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