VTBR.L Regulatory News (VTBR)

VTB Bank announces RAS financial results (standalone) for January 2022

VTB Bank (PJSC) (hereinafter referred to as the Bank) publishes its standalone key RAS financial results for January 2022.

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

"January results reflect a stable balance sheet structure, high liquidity, as well as seasonal dynamics of business and financial results.

"Current performance is the basis for the growth of business volumes and profitability indicators throughout the year in accordance with strategic guidelines."

Revenues and profitability

Net profit was RUB 1.3 billion in January 2022, while net interest income amounted to RUB 44.2 billion, and net fee and commission income was RUB 9.4 billion. Provision charge amounted to RUB 8.3 billion in January 2022, down by 54.9% year-on-year. As of 1 February 2022, the ratio of allowance for loan impairment to total loan portfolio was 5.1% (4.8% as of 1 January 2022).

Staff costs and administrative expenses amounted to RUB 15.2 billion in January 2022, up by 13.4% year-on-year.

Balance sheet

Total assets amounted to RUB 19.5 trillion as of 1 February 2022, an increase of 1.8% in January 2022.

Total loan portfolio reached RUB 13.3 trillion, a decrease of 0.2% in January 2022 due to the repayment of several loans. Retail loan portfolio increased by 1.0%.

As of 1 February 2022, more than RUB 76 billion of mortgage loans were issued, which is 67% higher than the corresponding period of the previous year, which is due to expectations regarding further rates growth, as well as the Bank's attractive market conditions.

In line with VTB Bank strategy the share of retail in total loan portfolio of the Bank continues to grow reaching 31.7% in January compared with 31.4% at the beginning of the year.

Loans to legal entities were RUB 9.1 trillion, a decrease of 0.8% since the beginning of the year.

Since the beginning of the year VTB Bank showed positive dynamics of loan portfolio of Medium and Small Business (MSB) clients: only in January 2022, the loan portfolio grew by RUB 13.8 billion with an increase of almost 1%, thereby leveling the slight drawdown of the portfolio in accordance with the contractual maturities of debt as of the beginning of the current year. It should be noted that the growth in lending is carried out in an environment where, historically, January is a difficult month in terms of seasonal lending activity.

Securities portfolio decreased by RUB 0.6% year-to-date to RUB 3.3 trillion, including through the sale of corporate bonds. It is also worth noting the complexity of the geopolitical situation, which had a significant impact on the stock markets, which led to a decrease in value for a number of assets.

Total customer funding was RUB 16.7 trillion as of 1 February 2022, an increase of 1.1% since the beginning of the year.

Customer funding from legal entities was RUB 10.9 trillion, an increase of 1.9% from the beginning of 2022. In January, the funds of large investment business clients showed positive dynamics. The growth of balances of these clients in January amounted to 12% on deposit accounts, and 4% on current accounts. The growth of funding from large business clients was contributed by, among other things, the funding from clients of the oil and gas, and nuclear industries.

Additionally there was an increase in the volume of customer funding by 5.7% or by RUB 113 billion since the beginning of the year (mainly due to demand accounts) from the clients of the Medium and small business segment. This growth is partially explained by the return of funds traditionally withdrawn by the end of the completed year.

Customer funding from individuals was RUB 5.8 trillion, a decrease of 0.5%.

Customer funding from individuals (without escrow accounts) decreased by 1.1% since the beginning of the year, due to the outflow of funds from current accounts (-5.5%); the deposit portfolio increased by 2.6% in January.

Customer funding structure remained stable: 65.2% was the funding from legal entities and 34.8% was the funding from individuals.

Capital and capital adequacy ratios of VTB Bank

As of 1 February 2022, total regulatory capital was RUB 1 701.1 billion (1.7 trillion), down by 5.6% in January.

As of 1 February 2022, total regulatory capital generally included base capital (CET 1) of RUB 1 152.6 billion and main capital (tier 1) of RUB 1 534.4 billion.

In December, base capital (CET 1) decreased by RUB 89.5 billion or by 7.2%.

The main capital (tier 1) for the same period decreased by RUB 77.8 billion or by 4.8%.

Capital adequacy ratios are well above the minimum regulatory requirements. As of 1 February 2022, the N1.0 (total capital) ratio equals to 10.20% (minimum regulatory threshold 8.0%), N1.1 (common equity) - 6.89% (minimum regulatory threshold 4.5%) and N1.2 (tier 1 capital) - 9.18% (minimum regulatory threshold 6.0%).

Risk-weighted assets (RWA) (the denominator of the equity (capital) adequacy ratio, H1.0) for January 2022 increased by 1.4% reaching RUB 16,680.3 billion.

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.