- Net income reached 3 billion rubles for 11 months of 2015
- Cut in bad-loan provisions caused profit to surge in November
VTB Group, Russia’s second-largest bank, had profit of 3 billion rubles for the first 11 months of the year after a surge in November more than made up for earlier losses.
VTB posted net income of 10.9 billion rubles ($155 million) in November, compared with a loss of 8.9 billion rubles a year earlier. The bank cut the amount of money set aside for bad loans, with provisions plunging to 1.3 billion rubles last month from 25.8 billion rubles in the same period of 2014.
VTB’s return to profit runs counter to the turbulence in Russia’s banking sector as the country braces for a second year of recession. The central bank revoked a record number of licenses in 2015 as bad debt erodes lenders’ assets. VTB Chief Financial Officer Herbert Moos said last month that the bank would break even this year and targets 50 billion rubles of profit next year.
“Such low provisioning is unlikely to be repeated,” Natalia Berezina, a banking analyst at UralSib Financial Corp., said by phone. “This could be aimed at achieving their guidance of a break-even year.”
VTB’s cost of risk dropped to 0.2 percent in November, compared with 3 percent a year earlier and 1.8 percent in the first 11 months of the year.