Lowering CB's key rate by 1 pp could improve VTB's bottom line by 21 bln rubles
MOSCOW. May 19 (Interfax) - Lowering the Central Bank's key lending rate by a whole percentage point might improve VTB's bottom line by 21 billion rubles, the bank's deputy CEO, Herbert Moos, said on a conference call.
"Lowering the rate by a percentage point would improve our financial result by 21 billion rubles in annual terms," Moos said.
He said a reduction in the Central Bank's rate by that amount would enable the bank to earn an additional 21 billion rubles in the year, and the timing of any cut was therefore crucial to VTB.
He said the Central Bank's recent decision to lower the key rate to 12.5 per annum was not enough for VTB to break even in 2015.
He said VTB was looking at a break-even scenario for 2015, but that it was rather early to talk about this now.
"The Central Bank has launched the process of lowering rates, and as we see it this is far from over," Moos said.
He said VTB's losses this year might not be as severe as originally forecast. In March, the bank was forecasting considerable losses this year due to growth in the cost of funding, but the current rate reductions mean it can make more positive forecasts.
Sberbank CFO Alexander Morozov said in March that a rate cut of a whole percentage point by the Central Bank would boost net interest income 35 billion rubles over a one-year horizon.
