Retail banking pre-tax income at Russia’s
second largest bank by assets, VTB, has risen by more than a fifth
year-on-year in the three months to 31 March to RUB8.2bn
Net interest income at the retail banking
division rose by 18% in the first quarter over the year-ago period
Net fee and commission income soared by 45.5%
Provisions for impairments from retail banking
declined by 37.9% year-on-year to RUB1.8bn.
Retail loans & deposits
Retail banking loans for the whole group rose
by 2% year-on-year to RUB555bn, while deposits rose by 4% to
Consumer loans and credit cards accounted for
51% of overall retail banking loans and generated RUB285bn in the
first quarter – an increase of 50% over the year-ago period.
Mortgage loans the second largest contributor
to overall retail banking loans, accounting for 38.4% of the
portfolio and rising by 18.9% year-on-year to RUB213bn.
In Russia, retail banking loans rose by 5% to
RUB508bn over the year-ago quarter, while deposits increased by 3%
to RUB749bn in the three months to end-March.
The rise both in loans and deposits resulted
in an increased market share for the bank:
VTB’s market share in retail loans in Russia
was 12.5% at the end of March, up from 10.5% in Q110; its market
share in deposits in the first quarter stood at 7.4% , up from 5.9%
in the corresponding period a year ago.
VTB’s non-performing loans ratio for loans to
individuals declined from 9.8% in the first quarter of 2010 to 7.7%
by end-March this year.
At group level, the bank recorded a 70.6%
year-on-year increase in first quarter net income of RUB26.1bn.
Net interest income (before provisions) rose
by 9.5% to RUB46bn. Net fee and commission income soared by 57% to
VTB had total assets of RUB4.45tr at the end
of March, an increase of 3.7% from year-end 2010.
VTB’s strong results are no exception:
Russia’s largest bank by assets, Sberbank, reported a 94.3%
year-on-year increase in first quarter net income to RUB83.8bn.
The bank has already published its half year
earnings, this time reporting a 182.4% year-on-year increase in net
income to RUB171.3bn.
Strategic deal to buy
On 15 July, VTB signed a strategic deal with
Russian Railways to acquire its shares in TransCreditBank
The deal will boost VTB’s market penetration
in mortgage lending and ATM distribution network:
TCB current ranks the 14th biggest
bank by assets in Russia, but fourth by mortgage lending and fifth
by number of ATMs.
VTB has already bought a 43.18% stake in TCB
in October 2010, for RUB21 per share.
VTB is now paying RUB24.4 per share for a
29.4% stake in TCB and will also pay an as of yet undisclosed
amount to buy a further 25% stake between 1 July 2012 and 31
VTB said that the deal gives the bank access
to 2m retail banking customers, a majority of whom are employed by
Citing Andrey Kostin, VTB Bank president and
chairman of the management board said the deal would create
Key metrics for TCB
- 290 offices in 197 cities in Russia;
- 2,400 ATMs;
- 1.5% market share in retail loans;
- 0.6% market share in retail deposits;
- Total assets of RUB390.9bn as of end-2010 (up by 51.2% from
- Net profit for FY10 of RUB7.5bn (FY09: 4.1bn);
- Net customer loans of RUB203.9bn as of end-2010 (up by 42.3%
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