VTBR.L Regulatory News (VTBR)

VTB Bank announces RAS financial results (standalone) for June and 6M 2021

VTB Bank (PJSC) (hereinafter referred to as the Bank) publishes its standalone key RAS financial results for June and six months of 2021.

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

"The results of June and the first half of the year reflect the Bank's return to a sustainable level of profitability on the back of a significant growth in the balance sheet and transaction volumes in the current year. The coalescence of strong organic business growth, normalised provisioning and moderate costs inflation provide a foundation for impressive results in the second half of the year as well as for the full year."

Revenues and profitability

In 1H 2021, the Bank showed robust growth in profitability metrics. Net profit was RUB 129.5 billion in 6M 2021, including RUB 17.5 billion in June 2021, 2.5 times and 175 times up year-on-year, respectively.

Net interest income amounted to RUB 287.1 billion in the first six months of 2021 and RUB 51.9 billion in June, up by 28.7% and 33.4%, respectively, compared with the same periods of the last year. The key driver for the net interest income growth was the increase in interest-earning assets - loan book and debt securities of the Russian Federation. The income from the debt securities of the Russian Federation increased 3.3 times year-on-year in 1H 2021 and amounted to RUB 33.0 billion.

Net fee and commission income continued to grow at a higher rate and amounted to RUB 77.8 billion in 1H 2021 and RUB 12.9 billion in June 2021, an increase of 36.3% and 38.7% respectively, from the same periods last year.

Provision charge amounted to RUB 58.5 billion in 1H 2021 (down 42.8% year-on-year) and RUB 10.6 billion for June 2021 (down 56.0% year-on-year). As of 1 July 2021, the ratio of allowance for loan impairment to total loan portfolio was 5.6% (5.6% as of 1 June and 5.3% as of 1 January).

Staff and administrative expenses amounted to RUB 95.1 billion and RUB 16.5 billion in 1H 2021 and in June 2021 respectively, up by 5.3% and 38.9% year-on-year.

Capital and capital adequacy ratios

As of 1 July 2021, total regulatory capital was RUB 1,811.7 billion, up by 5.4% in June and 10.1% since the beginning of the year. Total regulatory capital includes Base capital (CET 1) of RUB 1,249.1 billion and main capital (Tier 1) of RUB 1,537.6 billion. Total risk-weighted assets amounted to RUB 15,243.0 billion as of 1 July 2021, increasing by 0.9% in June and by 4.4% since the beginning of the year.

Capital adequacy ratios are well above the minimum regulatory requirements. As of 1 July 2021, the N1.0 (total capital) ratio was equal to 11.89%, N1.1 (common equity) - 8.18% and N1.2 (Tier 1 capital) - 10.08%.

In 1H 2021, the total amount of RUB 139.3 billion of subordinated bonds issued by the Bank was included in the regulatory capital (subordinated bonds amounting to RUB 76.9 billion were included in the regulatory capital in June).

Balance sheet

Total assets amounted to RUB 18.1 trillion as of 1 July 2021, increasing by 10.9% in 1H 2021 and by 1.4% in June.

Total loan book reached RUB 12.6 trillion, increasing by 6.6% in 1H 2021 and by 0.4% in June. Loans to individuals were RUB 3.8 trillion (30.2% of total loan portfolio), growing by 16.6% and 3.7% since the beginning of the year and in June respectively, while loans to legal entities were RUB 8.8 trillion, increasing by 2.8% since the beginning of the year and decreasing by 0.9% in June.

Securities portfolio grew by 41.4% YTD to RUB 3.0 trillion, including 3.6% growth in June. This growth was driven by the Bank's investments into federal loan bonds of the Russian Federation (OFZs).

Total customer funding was RUB 15.6 trillion as of 1 July 2021, increasing by 15.1% in 1H 2021 and by 1.1 % in June. Customer funding structure remains stable: 66.3% were deposits of legal entities and 33.7% deposits of individuals.

The unaudited financial performance indicators of VTB Bank presented above are collated based on the following forms 0409101 "Turnover balance sheet of credit organization" and 0409102 "Report on financial results of credit organization" as well as operational management reports as part of adjustments to the published forms. Capital adequacy ratios were calculated based on the operational financial data. The reported financial indicators are preliminary; hence, they can be supplemented and changed in the process of preparation of publishable financial reports of VTB Bank. As a result of such changes, final values may differ from the preliminary financial indicators presented above.