MOSCOW. Sept 29 (Interfax) - The president of Russia's VTB , Andrei Kostin, does not foresee a substantial increase in the share of toxic loans in the bank's loan portfolio and predicts improvements in VTB's balance sheet by year's end.
Kostin told the Financial Times in an interview that "Most of the damage ... already happened to us. The increase in non-performing loans we are seeing now is mainly problem loans maturing that we have already identified and reported at an early stage"
He said: "We don't expect any drastic worsening of our situation and in banking in general - unless, of course, there is a global second wave of crisis, but it does not look very likely at the moment."
The share of bad loans in VTB's portfolio currently comes to 7.8%. The bank expects this figure to edge up to 8% by year's end.
Kostin expects VTB's financial position to improve throughout the second half owing to the profitability of the bank's operations since the Central Bank has lowered interest rates. "At the end of the year we will have to create less provisions than we did in the first six months of the year. The model is much more optimistic,"
Nonetheless, VTB, which is Russia's second largest bank, is expected to post losses in its IFRS results by year's end owing to the increase in its reserves, the FT wrote.