JSC VTB Bank (VTBR)
JSC VTB Bank: VTB Group announces IFRS results for October and 10 months of
2019
04-Dec-2019 / 17:45 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 October and 10 months of 2019
04 December 2019
VTB Bank, the parent company of VTB Group, publishes its unaudited
consolidated IFRS results for October 2019 and the 10 months ended 31
October 2019.
Dmitry Olyunin, First Deputy President and Chairman of VTB Management Board,
said:
"We started the fourth quarter with continuing improvement of core
profitability on the backdrop of stable asset quality, slowing down of costs
growth and further strengthening of balance sheet structure. The Group's net
profit reached RUB 147.6 billion in 10M 2019 which corresponds to ROE of
11.4%, while in October 2019 net profit was RUB 19.6 billion (ROE 14.3%).
Gross customer loans increased by 3.9% year-to-date, while retail loans grew
by 15.8% and the share of retail loans in the total loan book reached 29.2%.
Funding from customers grew by 10.8% year-to-date and its share in the
Group's total liabilities rose to 82.4%. The results of October and 10M 2019
support our full year net profit guidance of RUB 200 billion".
In 10M 2019 VTB Group achieved measured growth and strengthened its market
positions
? Total assets amounted to RUB 15.6 trillion as of 31 October 2019, up
5.7% year-to-date, including growth of loans and advances to customers
(hereafter before provision charge for credit losses and other provisions)
of 3.9% year-to-date to RUB 11.9 trillion.
? In 10M 2019 retail lending was the key growth driver having increased by
1.2% in October and by 15.8% year-to-date. In October 2019 loan portfolio
to legal entities decreased by 1.0% due to repayment of several large
exposures. In 10M 2019 loan portfolio to legal entities decreased by 0.4%.
At the same time the Group achieved robust loan growth in SME segment
where the loan book grew by 11.7% year-to-date (including SME assets of
Vozrozhdenie Bank as of 31 December 2018).
? As of 31 October 2019 the Group's market share in Russia in corporate
and retail lending reached 19.0% (up 30 bps year-to-date) and 18.5%* (up
70 bps year-to-date), respectively.
? Deposits from legal entities increased by 3.0% in October and by 11.4%
in 10M 2019, while deposits from individuals increased by 0.9% in October
and by 10.0% in 10M 2019 significantly outperforming the average market
indicators.
? The share of customer funding in the Group's total liabilities reached
82.4% as of 31 October 2019 (31 December 2018: 78.6%). Out of total
funding from customers 42.0% was raised from individuals as of 31 October
2019.
? As a result of accelerated growth of customer funding in 2019 the ratio
of loan portfolio to customer funding (LDR ratio) dropped to 96.5% as of
31 October 2019 (31 December 2018: 102.8%).
? As of 31 October 2019 the Group's market share in Russia in corporate
and retail funding was 21.7% (up 100 bps year-to-date) and 15.1% (up 110
bps year-to-date), respectively.
VTB Group substantially improved its profitability metrics due to growth in
net operating income and the drop of provision charge for credit losses
? In October 2019 net profit amounted to RUB 19.6 billion, up 47.4%
year-on-year. In 10M 2019 net profit was RUB 147.6 billion.
? Net interest income was RUB 37.8 billion in October 2019 (up 1.1%
year-on-year) and RUB 361.6 billion in 10M 2019. The net interest margin
in 10M 2019 reached 3.3%. We expect improvements in net interest margin
and net interest income dynamics in November-December 2019 following the
easing of monetary policy and on the backdrop of continued loan portfolio
growth.
? Net fee and commission income was RUB 13.6 billion in October 2019 and
RUB 80.9 billion in 10M 2019, up 52.8% and up 12.2% year-on-year,
respectively. The Group's CIB business line was the key contributor to net
fee and commission income growth in October.
Strong asset quality and decrease of cost of risk supported the bottom line
result
? Cost of risk was 1.0% in October and 0.9% in 10M 2019, down 80 bps and
60 bps respectively. Total provision charge for credit losses and other
provisions amounted to RUB 10.4 billion in October 2019 and RUB 88.2
billion in 10M 2019, down 39.5% and 24.0% year-on-year, respectively. The
reduction of cost of risk and total provision charge reflects the
improving asset quality across all business lines.
? The Group's NPL ratio decreased to 5.0% of gross customer loans as of 31
October 2019 (down 70 bps year-to-date).The Group has significantly
increased the NPL coverage ratio to 124.3% as of 31 October 2019 (up 12.3
ppt year-to-date).
Cost growth in 10M 2019 was caused by the consolidation of recently acquired
banks and uneven calendarisation, while the growth rate continued to slow
down in October 2019
? Staff costs and administrative expenses amounted to RUB 206.7 billion in
10M 2019, up 17.4% year-on-year. The increase in staff costs and
administrative expenses was largely caused by acquisition and subsequent
consolidation of three banks (Bank Vozrozhdenie, West Siberian Commercial
Bank and Sarovbusiness Bank) as well as strengthening of IT team. The
costs growth significantly slowed down versus H1 2019 due to uneven
year-by-year calendarisation of variable personnel costs. Additionally VAT
increase in 2019 contributed to the growth of operating expenses.
? In October 2019, staff costs and administrative expenses increased by
3.7% year-on-year versus 19.4% year-on-year growth in 9 months 2019.
? On the backdrop of improving profitability the ratio of staff and
administrative cost to operating income before provisions (CIR) continued
to decline and was 38.8% in October 2019 versus 42.8% in 10M 2019.
The P&L statement components have been compared with modified financial
results for 10 months 2018 for the purposes of accuracy of the year-on-year
analysis (revenue and expenses of VTB Bank (Belgrade) JSC, "Post Bank",
PJSC,"Multicarta", LLC,VTB Bank, (Ukraine) PJSC and of all companies within
VTB Insurance Group have been excluded as if these companies have not been
consolidated by the Group during 2018; gain/loss recognised on disposal of
subsidiaries reflected in the line "Gains from disposal of subsidiaries and
associates" have not been adjusted).
*- Without sales of portfolios to the mortgage agent in 2019.
Attachment
Document title: VTB Group IFRS financial highlights as of 31 October 2019
Document: http://n.eqs.com/c/fncls.ssp?u=PLVVPVWUNJ [1]
ISIN: US46630Q2021
Category Code: MSCM
TIDM: VTBR
LEI Code: 253400V1H6ART1UQ0N98
Sequence No.: 33424
EQS News ID: 928569
End of Announcement EQS News Service
1: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=a3bec696d382dc4613e5852c14f95f13&application_id=928569&site_id=vwd&application_name=news
(END) Dow Jones Newswires
December 04, 2019 11:45 ET (16:45 GMT)
