VTB Bank announces the financial results of RAS (autonomous) for July and 7M 2021

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JSC VTB Bank (VTBR)
09-Aug-2021 / 09:00 CET / CEST
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VTB Bank announces the financial results of RAS (autonomous) for July and 7M 2021

VTB Bank (PJSC) (hereinafter referred to as the Bank) publishes its main autonomous RAS financial results for July and seven months of 2021.

Mikhail Kovalenko, Senior Vice-President, Head of Accounting and Reporting Department, said:

“Our July results mark the continuation of the Bank’s successful performance in the first half of the year, combining high profitability and strong organic growth in the activity. Basic banking income has shown high growth rates; provision charges remained at normal levels thanks to a stable loan portfolio. Costs increased as expected in July, reflecting significant spending on our digital transformation.

“We view our July results as confirmation of our updated earnings guidance and other key indicators for the Group for fiscal 2021.”

Turnover and profitability

In 7M 2021, the Bank posted robust growth in profitability indicators. Net profit was 154.3 billion rubles in 7M 2021, of which 24.8 billion rubles in July 2021, respectively 3.0 times and 460 times more year-on-year.

Net interest income amounted to RUB 334.9 billion in the first seven months of 2021 and to RUB 47.8 billion in July, up 26.3% and 13.5%, respectively, compared to the same periods of the previous year. The main drivers of net interest income growth were the increase in interest-bearing assets – the Russian Federation’s loan and debt portfolio. The Russian Federation’s debt securities income grew 3.6-fold year-on-year to 41.2 billion rubles in 7M 2021.

Income net of fees and commissions continued to grow at a higher rate and amounted to RUB 92.1 billion in 7M 2021 and RUB 14.3 billion in July 2021, an increase of 34.1% and 23.3% respectively , compared to the same periods of the previous year. The considerable increase in income net of fees and commissions is due to a constant increase in the volume of commissions from the sale of insurance products and commissions from the brokerage business.

Provision costs amounted to RUB 70.7 billion in 7M 2021 (down 48.5% year-on-year) and RUB 12.2 billion for July 2021 (down 65.1% from year after year). As of August 1, 2021, the ratio of the loan impairment allowance to the total loan portfolio was 5.5% (5.6% on July 1 and 5.3% on January 1).

Staff and administrative costs amounted to RUB 112.1 billion and RUB 17.0 billion in 7M 2021 and July 2021 respectively, up 7.5% and 22.3% year-over-year thanks to cost growth digital transformation. The monthly increase in administrative expenses in July 2021 is the result of a higher base rate of deposit insurance contributions payable by banks – members of the deposit insurance system to the Compulsory Deposit Insurance Fund.

Capital and capital adequacy ratios

As of August 1, 2021, total regulatory capital stood at 1,813.2 billion rubles, up 0.1% in July and 10.2% year-to-date, mainly due to profits made and the issuance of subordinated bonds.

As of 7M 2021, the total amount of RUB 147.7 billion of subordinated bonds issued by the Bank has been included in regulatory capital (subordinated bonds in the amount of RUB 8.4 billion have been included in regulatory capital in July 2021).

Total regulatory capital consists of Core Capital (CET 1) of RUB 1,226.6 billion and Principal Capital (Tier 1) of RUB 1,525.2 billion.

Capital adequacy ratios are well above minimum regulatory requirements. As of August 1, 2021, the ratio N1.0 (total capital) was equal to 11.75%, N1.1 (common equity) – 7.94% and N1.2 (Tier 1 capital) – 9.88%.

The capital adequacy ratio N1.0 increased mainly due to the growth of total equity and the transition to the Standard Measurement Approach (SMA) in accordance with Bank of Russia Regulation No. 744-П . The switch to the new standardized measurement approach based on financial results at April 1, 2021 has enabled the Bank to improve its capital ratio by 0.4 pp

At the start of the year, the N1.0 ratio was 11.28%.

Total risk-weighted assets stood at 15.4 trillion rubles as of August 1, 2021, up 2.6 percent in July and 5.7 percent year-to-date.

Balance sheet

Total assets amounted to 18.6 trillion rubles as of August 1, 2021, an increase of 13.6% in 7M and 2.4% in July 2021.

Total loan book reached 12.9 trillion rubles, an increase of 9.1% in 7M and 2.3% in July 2021. Personal loans amounted to 3.900 billion rubles, an increase of 19.2% and by 2.3% since the beginning of the year and in July 2021 respectively, while loans to legal persons amounted to 9 trillion rubles, an increase of 5.2% since the beginning of the year and 2.3% in July. Subsequently, the share of retail trade in the Bank’s total loan portfolio increased to 30.2% (27.6% at the end of 2020).

The main drivers of growth in the personal loan portfolio were the increase in mortgage and consumer loan issuance, debt ceding, as well as the seasonal slowdown in loan prepayments during the summer vacation period.

Securities portfolio rose 42.4% year-to-date to 3.3 trillion rubles, including 0.7% in July. This growth was driven by the Bank’s investments in Federal Debt Bonds of the Russian Federation (OFZ).

Total client funding amounted to 16 trillion rubles on August 1, 2021, an increase of 17.9% in 7M and of 2.4% in July 2021. The customer financing structure remained unchanged: 67.1% were deposits from legal entities and 32.9% of deposits from individuals.

The share of customer financing denominated in foreign currencies continued to decline, while the share of ruble financing increased further. Escrow account balances continued to grow amid an anticipated increase in mortgage loan issuance.

The unaudited financial performance indicators of VTB Bank presented above are gathered on the basis of the following forms 0409101 “Balance sheet of turnover of the credit institution” and 0409102 “Report on the financial results of the credit institution. credit ”as well as operational management reports as part of formal adjustments. The solvency ratios have been calculated on the basis of operational financial data. The financial indicators reported are preliminary; therefore, they may be supplemented and modified during the process of preparing the publishable financial reports of VTB Bank. Due to these changes, the final values ​​may differ from the preliminary financial indicators presented above.

Attachment

File: VTB-RAS-Financial-results-at-01-August-2021

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