VTB sees Q1 IFRS net profit slump 32.6% to 15.7 bln rubles
MOSCOW. July 2 (Interfax) - VTB saw its net earnings to International Financial Reporting Standards (IFRS) slump 32.6% year-on-year to 15.7 billion rubles in Q1 2013, Russia's second-largest bank reported.
Analysts polled by Interfax had predicted a 27.9% decline in VTB's net profit to 16.8 billion rubles.
VTB boosted its net interest income by 36.7% year-on-year to 73.8 billion rubles in Q1 2013.
Net commission income climbed 11.7% to 11.5 billion rubles, with the retail business contributing 8.2 billion rubles, or 58.6% of the total, and transaction banking contributing 4.2 billion rubles, or 30%, before inter-segment eliminations.
Operating income before provisions declined 2.6% to 92.9 billion rubles.
Provision charges for impairment of debt financial assets grew 7.8% to 22 billion rubles in Q1 2013. Provision charges for impairment of loans and advances to customers reached 1.6% of the average loan portfolio, compared to 1.1% in Q4 2012 and 1.7% in Q1 2012.
"In line with overall market trends, the increase in cost of risk was mainly driven by the creation of loan loss reserves in the rapidly growing retail segment," VTB said in the press release.
The VTB Group's core businesses - retail banking and corporate and investment banking - posted profit before tax of 15.8 billion rubles and 10.2 billion rubles, respectively, versus 13.3 billion rubles and 20.6 billion rubles in Q1 2012.
The net interest margin was 4.5% in Q1 2013, compared to 4.6% in Q4 2012. Adjusted for Bank of Moscow provision releases, the net interest margin was 4.2%, compared to 4.3% in Q4 2012.
Staff costs and administrative expenses amounted to 49.2 billion rubles, up 15.8% year-on-year, largely due to the expansion of the group's key businesses. The group's cost-to-income ratio was 53%, up from 44.5% in Q1 2012.
VTB grew its assets by 2.5% to 7.6 trillion rubles in Q1 2013, compared to 7.4 trillion rubles at the end of 2012.
The loan portfolio before provisions expanded by 4.1% to 5.3 trillion rubles. That included a 3.4% increase in the corporate loan portfolio to 4.1 trillion rubles, as well as a 6.5% boost in the retail loan portfolio to 1.2 trillion rubles.