JSC VTB Bank: VTB Group announces IFRS results for October and 10 months of 2018

VTB Group announces IFRS results for October and 10 months of 2018

30.11.2018

VTB Bank, the parent company of VTB Group, today publishes its unaudited consolidated IFRS results for October 2018 and the 10 months ended 31 October 2018.

Income Statement

Net profit was RUB 151.9 billion in 10M 2018 (67.1% increase year-on-year) and RUB 12.2 billion in October 2018 (21.8% decrease year-on-year) versus net profit of RUB 90.9 billion in 10M 2017 and RUB 15.6 billion in October 2017. Net operating income before provisions grew 16.6% year-on-year in 10M 2018 and 2.8% year-on-year in October 2018 to RUB 534.6 and RUB 55.7 billion respectively;

Net interest income was RUB 396.5 billion in 10M 2018, up 3.6% year-on-year, and RUB 37.9 billion in October 2018, down 2.8% year-on-year. Net interest margin was 4.0% in 10M 2018 and 3.5% in October 2018 down 10 bp and 60 bp versus 10M 2017 and October 2017, respectively;

Net fee and commission income was RUB 75.9 billion in 10M 2018 and RUB 6.5 billion in October 2018, up 1.2% and down 18.8% year-on-year, respectively;

Total provision charge for credit losses and other provisions amounted to RUB 128.6 billion in 10M 2018 and RUB 17.2 billion in October 2018, down 0.8% and up 50.9% year-on-year, respectively. Cost of risk was 1.6% in 10M 2018 and 1.7% in October 2018 versus 1.6% in 10M 2017 and 1.4% in October 2017;

Staff costs and administrative expenses amounted to RUB 209.9 billion in 10M 2018 and RUB 22.6 billion in October 2018, up 1.1% and unchanged year-on-year, respectively. Cost-to-income ratio was 39.3% in 10M 2018 and 40.7% in October 2018 versus 45.3% in 10M 2017 and 41.8% in October 2017.

Statement of Financial Position

Total assets amounted to RUB 14,649.9 billion as of 31 October 2018, up 4.1% in October and up 13.1% year-to-date (01 January 2018: RUB 12,947.4 billion).

Gross loans and advances to customers grew 2.5% in October and 14.3% year-to-date to 11,245.1 billion as of 31 October 2018 (01 January 2018: RUB 9,841.1 billion). Adjusted for the effect of change in consolidation method of Post Bank gross loans to customers grew 16.8% year-to-date. Gross loans to legal entities increased by 1.4% in October and by 15.2% year-to-date, while gross loans to individuals increased by 6.1% in October and by 11.5% year-to-date. Gross loans to individuals adjusted for the effect of change in consolidation method of Post Bank grew 21.7% year-to-date;  

NPL ratio was 6.5% of total gross loans as of 31 October 2018, down 40 bp month-on-month and year-to-date. As of 31 October 2018, NPL coverage ratio was 106.5% (01 January 2018: 107.9%);

Total customer deposits increased by 1.9% in October and by 8.5% year-to-date, reaching RUB 9,923.6 billion as of 31 October 2018. Adjusted for the effect of change in consolidation method of Post Bank total customer deposits increased by 10.6%. Deposits from legal entities increased 0.7% in October and 6.1% year-to-date, while deposits from individuals grew 3.6% in October and 12.2% year-to-date. Adjusted for the effect of change in consolidation method of Post Bank deposits from individuals increased by 17.7%.

Loan-to-deposit ratio was 105.4% as of 31 October 2018 (01 January 2018: 99.6%);

As of 31 October 2018, Tier 1 CAR was 11.8% (01 January 2018: 12.6%), and total CAR was 13.2% (01 January 2018: 14.4%).

In October 2018, VTB acquired controlling stake in Vozrozhdenie Bank and included the latter in the consolidation perimeter of VTB Group. Vozrozhdenie Bank will be shown as a separate reporting segment in VTB Group segment analysis until it is integrated into VTB global business line reporting system subject to subordination to heads of VTB's global business lines.  As of 31 October 2018, assets of "Vozrozhdenie Bank" segment amounted to RUB 235.2 billion or 1.6% of VTB Group's total assets. Net profit of "Vozrozhdenie Bank" segment in 10M 2018 reached RUB 2.2 billion or 1.4% of VTB Group's net profit.

In September 2018, VTB Group and the Russian Post signed an amended shareholder agreement with respect to PJSC Post Bank, which turned the latter into a joint venture. As at 30 September 2018, VTB Group accounted for its shareholding in PJSC Post Bank as an investment into a joint venture accounted under the equity method.