JSC VTB Bank (VTBR)
VTB Group announces IFRS results for 2Q 2019
08-Aug-2019 / 09:05 CET/CEST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
VTB Group announces IFRS results for 2Q 2019
VTB Bank ("VTB" or "the Bank"), the parent company of VTB Group ("the
Group"), today publishes its Interim Condensed Consolidated Financial
Statements for the three months and first half of the year ended 30 June
2019, with the Independent Auditor's Report on Review of these Statements.
Andrey Kostin, VTB President and Chairman of the Management Board, said: "We
achieved robust business growth in the first half, and continued to expand
our market shares in our priority Retail and SME segments. With lending
volumes up, an improving interest rate environment and stable credit
quality, as well as proactive efficiency measures to keep staff costs and
administrative expenses in check, we are poised to post strong results in 2H
2019 and deliver on our FY 2019 net profit target of RUB 200 billion.
"While remaining focused on achieving our financial targets, we are also
delivering on long-term strategic goals, transforming VTB into an efficient,
technology-driven, client-centric bank that demonstrates intensive growth
supported by initiatives in the digital economy."
FINANCIAL AND OPERATING HIGHLIGHTS
Income Statement
RUB billion 1H 2019 1H 2018 Change, % 2Q 2019 2Q 2018 Change, %
Net interest 213.6 238.1 (10.3%) 109.4 121.8 (10.2%)
income
Net fee and 44.9 42.9 4.7% 26.0 22.3 16.6%
commission
income
Operating 269.8 316.3 (14.7%) 132.8 163.7 (18.9%)
income
before
provisions
Provision (45.4) (69.0) (34.2%) (30.2) (48.3) (37.5%)
charge*
Staff costs (125.6) (124.7) 0.7% (64.9) (61.6) 5.4%
and
administrati
ve expenses
Net profit 76.8 99.8 (23.0%) 30.3 44.3 (31.6%)
*Includes provision charge for impairment of debt financial assets and
provision charge for impairment of other assets, credit related commitments
and legal claims.
? Net profit for 1H 2019 decreased by 23.0% year-on-year to RUB 76.8
billion, as pressure on the net interest margin brought net interest
income down by 10.3% year-on-year and other operating income declined by
68.0% year-on-year. This was partially balanced by a lower provision
charge for 1H 2019 and staff costs and administrative expenses remaining
nearly flat year-on-year.
? Net interest income amounted to RUB 213.6 billion in 1H 2019, compared
to RUB 238.1 billion a year earlier. While lending volumes grew in the
first half of 2019, the net interest margin for the period amounted to
3.3%, compared to 4.1% for 1H 2018. Funding costs remained 40 bps higher
year-on-year at 5.3% for 1H 2019, driving a 25.1% year-on-year rise in
interest expense, while interest income rose at a slower pace of 8.3%
year-on-year as return on interest-earning assets was 30 bps lower
year-on-year at 8.4%.
? Net fee and commission income rose by 4.7% year-on-year to RUB 44.9
billion in 1H 2019. The Group's retail and mid-corporate business lines
contributed to strong 16.6% year-on-year growth in net fee and commission
income in 2Q 2019.
? The cost of risk grew to 1.1% in 2Q 2019, in line with guidance, and
amounted to 0.8% in 1H 2019, down by 80 bps year-on-year. The low CoR for
1H 2019 reflects a 34.2% year-on-year drop in the provision charge, which
amounted to RUB 45.4 billion for the period.
? The Group's costs to operating income before provisions ratio was 46.6%
in 1H 2019, compared to 39.4% for 1H 2018, while the cost to assets ratio
was 1.7% in 1H 2019 compared to 1.9% for 1H 2018. The efficiency ratios
were driven by a modest 0.7% year-on-year growth in staff costs and
administrative expenses, to RUB 125.6 billion in 1H 2019.
Statement of financial position
RUB billion 30-Jun-19 31-Mar-19 1-Jan-19 Change in Change in
6M 2019, 2Q 2019, %
% or bps or bps
Total assets 15,055.3 14,841.8 14,760.6 2.0% 1.4%
Loans and 11,623.2 11,287.9 11,423.5 1.7% 3.0%
advances to
customers,
including
pledged under
repurchase
agreements
(gross), as
reported
Gross loans 8,323.6 8,121.9 8,435.0 (1.3%) 2.5%
to legal
entities
Gross loans 3,299.6 3,166.0 2,988.5 10.4% 4.2%
to
individuals
Customer 10,738.0 10,149.0 10,403.7 3.2% 5.8%
deposits
Deposits from 6,029.5 5,582.2 5,995.8 0.6% 8.0%
legal
entities
Deposits from 4,708.5 4,566.8 4,407.9 6.8% 3.1%
individuals
NPL ratio 5.7% 5.8% 5.7% 0 bps (10 bps)
LDR ratio 101.5% 104.0% 102.8% (130 bps) (250 bps)
Tier 1 CAR 12.0% 12.3% 12.0% 0 bps (30 bps)
Total CAR 13.2% 13.7% 13.5% (30 bps) (50 bps)
? The Group's loan book grew by 1.7% in 1H 2019 to RUB 11,623.2 billion,
as continued strong growth in retail lending of 10.4% outweighed a 1.3%
decline in the corporate loan book during the period. Corporate lending
grew in 2Q 2019 by 2.5%, while retail lending growth decelerated to 4.2%
during the period (+5.9% in 1Q 2019). The Group's market share in Russia
in corporate and retail lending stood at 19.3% (+70 bps ytd) and 18.4%
(+60 bps ytd), respectively.
? The Group's NPL ratio was to 5.7% of gross customer loans as of 30 June
2019, flat compared to 1 January 2019, and down 10 bps from 31 March 2019.
The allowance for loan impairments at the end of the first half was 6.3%
of the total loan book, compared to 6.4% as of 1 January 2019 and 6.5% as
of 31 March 2019. The NPL coverage ratio amounted to 110.8% as of 30 June
2019.
? Customer deposits rose to RUB 10,738.0 billion as of 30 June 2019, up by
3.2% during the first half and bringing customer funding to 79.5% of the
Group's liabilities, while the loans-to-deposit ratio was 101.5% as of 30
June 2019, compared to 104.0% as of 31 March 2019 and 102.8% at the start
of 2019.
? Deposits from legal entities rose by 0.6% in 1H 2019, while deposits
from individuals rose by 6.8%. The Group's market share in Russia in
corporate and retail funding stood at 20.9% (+20 bps ytd) and 14.9% (+90
bps ytd), respectively.
? The Group continued to maintain a low level of reliance on wholesale
funding, with the share of debt securities issued in total liabilities at
just 2.4% as of 30 June 2019, compared to 2.0% as of 1 January 2019.
? VTB Capital continued its award-winning performance, leading the
Dealogic ranking of Russian International DCM bookrunners and the
Bloomberg Eastern Europe Bonds Bookrunner ranking for the period. VTB
Capital was also named #1 Brokerage Firm in Russia according to the annual
Extel Survey 2019 conducted among investors, and the VTB Capital Research
team ranked #2 in Russia.
? VTB maintained solid capital levels during the first quarter, with the
total and Tier 1 capital adequacy ratios amounting to 13.2% and 12.0%,
respectively, as of 30 June 2019, compared to 13.5% and 12.0%,
respectively, as of 1 January 2019.
Attachment
Document title: VTB 1H'2019 IFRS report
Document: http://n.eqs.com/c/fncls.ssp?u=KTIYMWPCRT [1]
ISIN: US46630Q2021
Category Code: MSCU
TIDM: VTBR
LEI Code: 253400V1H6ART1UQ0N98
Sequence No.: 16121
EQS News ID: 854201
End of Announcement EQS News Service
1: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=97dea2568af8f8fedee760ce0a156566&application_id=854201&site_id=vwd&application_name=news
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August 08, 2019 03:05 ET (07:05 GMT)
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