Promsvyazbank reduces net profit forecast for 2011 to 5 bln rubles
MOSCOW. Aug 31 (Interfax) - Promsvyazbank has revised its IFRS net profit forecast for this year, reducing it from 8 billion rubles to 5 billion rubles, the bank's first vice president Alexandra Volchenko told journalists on Wednesday.
"We revised the net profit forecast in June from 8 billion rubles to 5 billion rubles," she said.
Volchenko cited three reasons that forced the bank to be more conservative: low demand for corporate loans, the slow relaunch of consumer loan products and the authorities' decision to raise insurance contributions.
She added that Promsvyazbank expected a more substantial stabilization of the Russian economy. If this had happened, demand for corporate loans would have been higher, which would have allowed the bank to raise its net interest margin. "In regards to consumer loans, we expected the 'loan factory' to start up faster," Volchenko said.
Promsvyazbank's IFRS loan portfolio in the first half went up by 4%. The bank's loan portfolio for small and medium-sized business expanded by 34%, consumer loans - 2% and corporate loans - 0.5%.
The bank stopped providing consumer loans in the summer of 2008 and only restarted these operations in the summer of 2010. At the same time, total new loans started topping the portfolio's quarterly amortization only in the second quarter of 2011 (the loan portfolio expanded by 5% in the second quarter).
Promsvyazbank posted 2.5 billion rubles in IFRS net profit for 2010. The bank's net profit for the first half of this year came to 1.2 billion rubles.