VTB Group announces IFRS results for 3Q 2020


VTB Bank (“VTB” or “the Bank”), the parent company of VTB Group (“the Group”), today publishes its Interim Condensed Consolidated Financial Statements for the three months and nine months ended 30 September 2020 with the independent auditor’s report on review of these statements.

Andrey Kostin, VTB President and Chairman of the Management Board, said:

"VTB Group has achieved good performance against key operating metrics in 9M 2020. While we delivered sizeable growth in net interest and commission income, expenses rose at a modest pace. Against the backdrop of a recovery in business and consumer activity following the spring decline caused by the pandemic, we achieved strong growth in our loan portfolio and client base.

"Following the inevitable deterioration of the financial condition of some types of borrowers due to the restrictive measures, we have significantly increased loan loss provisions, which put strong pressure on the bottom line. VTB Group’s net income in January-September 2020 amounted to RUB 59.1 billion, having decreased by 54% year-on-year.

“The unprecedented circumstances that have impacted the entire world have confirmed we have been pursuing the right strategy of accelerated digitalisation and transformation of the business and processes. Over the past several months, VTB team has made remarkable progress on further improving our services and applications and strengthening customer relations as a bank of first choice. This bodes well for profitability to get back in line with strategic targets in the foreseeable future.”


RUB billion

30 September 2020

30 June 2020

31 December 2019

Change in 9M 2020, % or bps

Change in 3Q 2020, % or bps

Total assets






Loans and advances to customers, including pledged under repurchase agreements (gross), as reported






Legal entities












Customer funding






Legal entities












NPL ratio




100 bps

60 bps

LDR ratio




-70 bps

340 bps

VTB Group achieved strong growth in core banking income and business volumes in 9M 2020

The total loan book grew by 12.9% in 9M 2020

  • For 9M and 3Q 2020, the Group’s total loan book increased by 12.9% and 8.3%, respectively, to RUB 12,936.6 billion. Adjusted for the effect of foreign currency revaluation, the increase in the total loan book amounted to 6.1% and 4.7%, respectively.
  • Loans to legal entities have increased by 13.5% since the beginning of the year (4.2% adjusted for the effect of currency revaluation), mainly due to the expansion of corporate lending in 3Q 2020 amid a general recovery in economic activity.
  • Loans to individuals have increased by 11.4% since the beginning of the year, mainly due to a 16.8% increase in mortgage lending, which was partially offset by a decrease in the volume of car loans. In 3Q 2020 the Group’s mortgage portfolio grew by a record RUB 96.8 billion, driven by VTB’s active participation in the subsidised mortgage programme launched in April 2020. Since the state programme was launched, VTB has issued over 45 thousand mortgages at a preferential rate with a total value of RUB 140 billion. The state support programme consistently represents up to a quarter of VTB’s mortgage issuance.
  • As of 30 September 2020, secured loans (mortgages and car loans) accounted for 53.5% of total retail lending, an increase of 50 bps in 3Q and 170 bps for 9M 2020.
  • The Group’s market share in retail lending in Russia was 17.8%, an increase of 40 bps since the beginning of the year; the Group’s share in corporate lending was 17.3%, a decrease of 90 bps since the beginning of the year.

Customer funding increased by 12.7% in 9M 2020

  • Customer funding for 9M and 3Q 2020 grew by 12.7% and 4.4%, respectively, to RUB 12,369.1 billion. Adjusted for the effect of foreign currency revaluation, the increase in the total customer funding amounted to 3.7% and −0.2%, respectively.
  • Customer funding from legal entities increased by 15.0% and 3.7% in 9M and 3Q 2020 (excluding the effect of currency revaluation, 6.7% and −0.5%), respectively. Customer funding from individuals increased by 10.0% and 5.2% (excluding the effect of currency revaluation, 0.2% and 0.2%), respectively.
  • As of the end of 9M 2020, the share of current accounts in the total amount of customer funding had increased considerably, from 25.2% as of 31 December 2019 to 35.1% as of 30 September 2020.

  • As of 30 September 2020, the loans-to-deposits (LDR) ratio was 97.5%, compared with 94.1% as of 30 June 2020 and 98.2% as of 31 December 2019.
  • The Group’s market share in Russia in corporate and retail funding was 19.4% (down 80 bps since the beginning of the year) and 14.9% (down 20 bps since the beginning of the year), respectively.

Income statement

RUB billion

9M 2020

9M 2019

Change, %

3Q 2020

3Q 2019

Change, %

Net interest income







Net fee and commission income







Operating income before provisions







Provision charge(1)







Staff costs and administrative expenses







Net profit







(1) Includes provision charge for credit losses on debt financial assets, provision charge for credit losses on credit-related commitments and other financial assets, and provision charge for legal claims and other commitments.

In 9M 2020, net operating income before provisions increased 6.0% amid strong growth in net interest and net fee and commission income

  • The Group’s net profit amounted to RUB 59.1 billion for 9M and RUB 17.2 billion for 3Q 2020, decreasing by 53.8% and 66.4% year-on-year, respectively, as a result of rising provision charges and the negative revaluation of non-core assets.
  • Net interest income for 9M 2020 increased by 19.7% year-on-year as a result of growth in interest-bearing assets and an increase in net interest margin. Net interest margin was 3.8% for 9M and 3Q 2020, up from 3.3% in 9M and 3Q 2019. Net interest margin has benefited during the year from the easing of monetary policy and the revaluation of liabilities, which outstripped the revaluation of assets.
  • Funding costs stood at 3.8% in 9M 2020, a decrease of 150 bps year-on-year, which helped drive interest expenses down by 20.7%, while interest income declined at a slower pace of 4.9%. At the same time, the return on interest-generating assets decreased by 80 bps year-on-year to 7.6%.
  • Net fee and commission income increased by 25.9% year-on-year in 9M 2020 to RUB 84.7 billion. The growth in net fee and commission income was driven mainly by robust growth in commissions for securities and capital markets transactions, supported by further expansion of VTB Capital Investments’ business, and steadily increasing commissions from the sale of insurance products.

External factors, including declining oil prices and the COVID-19 pandemic, led to an increase in provision charges in 9M 2020

  • Cost of risk increased by 100 bps in 9M 2020 to 1.9%. Provision charges amounted to RUB 185.9 billion, an increase of 138.9% year-on-year. The increase in provision charges was due to the impact of the COVID-19 pandemic on the state of the Russian economy and the quality of the Group’s loan book.
  • The NPL ratio stood at 5.7% of gross customer loans as of 30 September 2020, compared with 5.1% as of 30 June 2020 and 4.7% as of 31 December 2019. As of 30 September 2020, the Group had increased the allowance for loan impairment as a share of the total loan book to 6.8%, compared with 6.7% as of 30 June 2020 and 6.0% as at 31 December 2019. The NPL coverage ratio was 119.3%.

VTB Group achieved further operating efficiency improvements in 9M 2020

  • Personnel and administrative expenses for 9M 2020 amounted to RUB 192.1 billion, an increase of 4.2% year-on-year.
  • Implementing cost-saving initiatives and improving operational efficiency are key long-term priorities for the Group. As of the end of 9M 2020, the costs-to-income (CIR) ratio had decreased to 42.7% from 43.4% a year earlier.


Leader in investment banking

During 3Q 2020, VTB Capital remained #1 in investment banking services in Russia. The Company was the #1 M&A advisor in Russia and the CIS according to Dealogic and Mergermarket, and it was also #1 in debt capital markets in Russia and the CIS according to Dealogic, Refinitiv and Bloomberg.

Continued growth of the investment products sales platform VTB Capital Investments

  • VTB Capital Investments’ assets under management increased by 49.4%, or RUB 949 billion, in 9M 2020 to RUB 2.9 trillion (the increase in assets in 3Q 2020 amounted to RUB 308 billion). The assets of retail and corporate clients have grown by 60% and 40%, respectively, since the beginning of the year. VTB Capital Investments’ total number of clients increased 1.5x to more than 1 million individuals and legal entities. Fee and commission income for 9M 2020 more than doubled year-on-year to RUB 13.5 billion. Total trading volume exceeded RUB 14 trillion in 9M 2020, which is 1.8x higher than for all of 2019.
  • VTB Capital Investments remains focused on the development of the digital investment platform VTB My Investments. The number of users of the VTB My Investments mobile application has doubled since the beginning of 2020 to 465 thousand; more than 200 thousand customers use the mobile application every day. The volume of monthly transactions made through the application exceeds RUB 1 trillion, which is an increase of more than 2.5x from the beginning of the year.
  • VTB My Investments won an Investfunds Award in the category Best Brokerage Company Mobile Application 2019.
  • In 2020, VTB Capital Investments launched Russia’s first funds for retail investors to include environmental, social, and corporate governance (ESG) factors in the investment selection process: the open-end VTB — Equity Fund. Responsible investment, and the open-end VTB — Bond Fund Responsible investment.

Key projects and initiatives of VTB Group’s global business lines in 3Q 2020

Medium and Small Business global business line

Projects to increase transaction activity:

  • A new version of VTB Business Lite mobile banking for entrepreneurs was launched with new functionality and an updated design.
  • As part of the development of the Universal Business Card, an automated top-up service was launched that allows clients to set a minimum balance for their card account; once that balance is reached, the Bank will automatically transfer the required amount from the client’s current account to their card account.

Product and customer experience digitalisation projects:

  • In Q3 2020, a new mobile application was launched called VTB Business QR, which enables businesses to accept payments from individuals through the Faster Payments System using only a smartphone and a QR code.
  • The business registration service at www.start.vtb.ru has been updated. Medium and Small Business clients now have access to completely free online business registration without paying state fees and without going through the Federal Tax Service.
  • A new conveyor is being piloted for corporate clients that will make it possible to start offering new pre-approved loans, express loans and guarantees for small and medium-sized enterprises in 4Q 2020.

Retail Business global business line

A number of initiatives were implemented in 3Q 2020 to drive customer base growth and expand customer reach in the market. As a result, as of 30 September 2020 the number of active Bank clients reached an all-time high of 13.5 million. The increase in customer activity was due to a record number of new customers (561 thousand as the end of the quarter) and a considerable increase in the number of clients who carried out operations during the quarter (878 thousand). The biggest increase was seen in payroll accounts, reflecting the revival of business activity in 3Q 2020.

As part of efforts to improve the efficiency of customer service, a new office format was launched in 3Q 2020 that will reduce customer waiting times by a third and increase work efficiency by 40%. Beginning in 2021, VTB plans to launch every new branch in this format.

Projects to increase transaction activity:

  • VTB Bank’s flagship product — the debit Multicard — has been relaunched. Multicards are now being issued and serviced at no charge, with rewards of up to 3%, depending on the selected loyalty option, which can be changed at any time.
  • In July 2020, VTB became one of the first banks in the market to enable customers to receive transfers from legal entities by telephone number through the Faster Payments System.

Funding cost reduction projects:

  • In August 2020, an automated top-up function was launched for savings accounts in mobile and online banking, and an advertising campaign was launched to promote the Kopilka savings account.

Product digitalisation projects:

  • VTB has started implementing the first credit conveyor in Russia based on a microservice platform that uses advanced analytics. As part of the project, a new technology was launched for the development of pre-approved offers for cash loans and credit cards.
  • A pilot project was started to enable digital car purchases. Customers can access a catalogue on the Bank’s website, where they can choose the vehicle they like, get online approval for a loan in a few minutes and reserve a car from the dealer’s showroom. During the first phase, the pilot will be carried out in Moscow and St. Petersburg.

Customer experience improvement projects:

  • Robots have been set up to make payments to customers. Now the robots not only make decisions on applications but also process payments independently, which enables VTB clients to receive money the same day.
  • WhatsApp virtual assistant has been launched that knows everything about VTB products and services and will be able to answer more than 1,300 questions.
  • Remote restructuring of car loans was launched.

In Q3 2020, VTB Group developed a number of important IT initiatives

  • As part of efforts to improve the efficiency of intra-bank processes, a consolidated automated personnel management system is being piloted.
  • The first stage in upgrading the data processing centre in Perovo has been completed. The functions of the data processing centre include improving the disaster recovery and reliability of VTB Bank’s IT systems, communication channels and the entire IT infrastructure.
  • The Bank continues to systematically improve the reliability of its IT services and systems. The reliability index from the beginning through the end of September 2020 increased by more than 30 bps, from 99.40% to 99.74%. The time needed to carry out follow-up remedial action was reduced by 67%, and the response time to IT-related incidents was cut in half.