VTB Quarterly Net Jumps Sixfold After Oil-Refinery SaleBy
Net income climbs to 16 billion rubles in second quarter
VTB had 11.9 billion-ruble gain from sale of Mariisky plant
VTB Group, Russia’s second-biggest bank, boosted second-quarter profit by more than sixfold as the economy shows signs of recovering and after the company sold the Mariisky oil refinery in June.
Net income increased to 16 billion rubles ($250 million) from 2.5 billion rubles a year earlier, VTB said in a statement on Tuesday. The sale of the Mariisky oil refinery contributed 11.9 billion rubles to after-tax profit from subsidiaries, according to its quarterly report.
The refinery’s sale should be considered in relation to net interest income, according to VTB’s Chief Financial Officer Herbert Moos, who said comparing the group’s net profit to the refinery’s sale was “worse than comparing apples and oranges.” VTB got 4.2 billion rubles for the refinery and unloaded 7.7 billion in negative assets from the sale.
Net interest income, the difference between interest earned and interest paid on loans, grew 65 percent from the second quarter of last year to 108.7 billion rubles. Provisions for loan losses expanded 20 percent to 30.3 billion rubles, which was still lower than the Interfax consensus estimate of 52 billion rubles.
Banking industry profits in Russia are heading back toward levels last seen in 2014, according to a central bank estimate. The economy has shown signs of emerging from its longest recession in two decades and lenders margins have shown increasing margins. VTB, among the Russian banks targeted by U.S. and European Union sanctions over the Kremlin’s role in the Ukraine conflict, was hit hard last year by low oil prices and the ruble’s collapse.