VTB Group announces IFRS financial results for 2M 2021
VTB Bank, the parent company of VTB Group (the “Group”), today publishes its unaudited consolidated financial results in accordance with IFRS for the first two months of 2021.
Dmitry Pianov, member of the Management Board and Chief Financial Officer of VTB Bank, said:
"Our performance in the first two months of 2021 confirms that VTB Group is solidly on track to meet its profit targets, having left the main negative impacts of last year’s COVID-19 pandemic behind. VTB’s net profit in January—February amounted to RUB 58.4 billion, which corresponds to a return on equity of 20.4%, an increase of 51% year-on-year — prior to the pandemic.
“These results are fully in line with our forecasts for operating income and net income for the current year in the context of the economic recovery and the ongoing technological transformation of our business, as well as continued growth of our active client base.”
- As of 28 February 2021, gross loans and advances to customers had increased by 0.4% and amounted to RUB 13.2 trillion (currency revaluation effect did not influence this performance).
- Loans to individuals increased by 2.9% since the beginning of 2021, amounting to RUB 4.0 trillion. The total portfolio of loans to legal entities decreased by 0.7% (adjusted for currency revaluation, loans to legal entities decreased by 0.6%). At the same time, the loan portfolio in the SME segment has increased by 2.4% since the beginning of the year.
- Since the beginning of 2021, customer funding has increased by 6.8% to RUB 13.7 trillion (excluding currency revaluation, the increase was 6.6%).
- Customer funding from legal entities has increased by 12.2% since the beginning of the year on the back of strong growth in current account balances (adjusted for currency revaluation, the increase was 12.0%). Customer funding from individuals has increased by 0.1% since the beginning of the year as a result of a significant increase in savings account balances along with a decrease in funds invested in term deposits (adjusted for currency revaluation, individual customer funding decreased by 0.1%).
- The share of customer funding in the Group’s total liabilities increased in the first two months of 2021 to 82.0% (up from 78.1% as of 31 December 2020).
- As a result of faster growth in customer funding, the Group’s LDR ratio decreased to 89.8% as of 28 February 2021 (down from 95.6% as of 31 December 2020).
The Group greatly improved profitability amid strong growth in key sources of revenue and stability in terms of the quality of the loan portfolio.
- VTB Group’s net profit in the first two months of 2021 amounted to RUB 58.4 billion, an increase of 50.5% year-on-year.
- Net interest income amounted to RUB 94.6 billion, up 23.7% year-on-year. Net interest margin was 3.7%, an increase of 10 bps year-on-year.
- Net fee and commission income amounted to RUB 24.0 billion, an increase of 36.4% year-on-year. The strong growth in net fee and commission income was driven by the Group’s expanding transactional business and steadily increasing commissions from the sale of insurance products and brokerage commissions.
- The Group’s cost of risk was 0.4% for the first two months of the year, down 60 bps year-on-year. At the same time, provision charge amounted to RUB 8.4 billion, down 53.3% year-on-year.
- The Group’s NPL ratio amounted to 5.6% as of 28 February 2021 (down 10 bps from the beginning of the year). As of 28 February 2021, the NPL coverage ratio remained high at 122.7% (compared with 120.6% as of 31 December 2020).
- Staff and administrative expenses amounted to RUB 41.8 billion for the first two months of 2021, down 4.6% year-on-year.
- Rising profitability supported a considerable improvement in operating efficiency: the costs to operating income before provisions ratio decreased 4.8 p.p. year-on-year and amounted to 33.8%.
The VTB Capital Investments platform for investment products continues to deliver strong growth in client assets and fee and commission income
- For the first two months of 2021, VTB Capital Investments’ total client assets increased by 5.5%, to RUB 3.6 trillion. Assets from individual customers have grown by 8.9% since the beginning of the year to RUB 2.0 trillion.
- In the first two months of this year, the client base of VTB Capital Investments grew by more than 160 thousand and about 200 thousand new accounts were opened.
- VTB Capital Investments fee and commission income for the first two months of 2021 increased 2.5x year-on-year and reached RUB 4.5 billion.