VTBR.L Regulatory News (VTBR)

VTB Group announces IFRS financial results for April and 4M 2021

VTB Bank, the parent company of VTB Group (the "Group"), today publishes its unaudited consolidated financial results in accordance with IFRS for April and the first four months of 2021.

Dmitry Pianov, a member of the Management Board and Chief Financial Officer of VTB Bank, said:

"In April, VTB Group again delivered a strong bottom line, continuing the excellent performance of the first quarter. Net profit was RUB 29.5 billion, with ROE of 19.0%, in April and RUB 114.6 billion, with ROE of 19.2%, for the first four months of the year.

"These results reflect robust growth of core banking business revenues supported by a stable economic situation and benign operating environment as well as the solid expansion of the Bank's business volumes and client base on the back of VTB's ongoing technological transformation.

"We fully confirm our guidance to achieve the full-year return on capital envisaged by VTB's development strategy."

Total loan book remains stable amid an increase in the share of retail lending

As of 30 April 2021, total gross loan portfolio amounted to RUB 13.6 trillion, an increase of 3.4% since the beginning of the year (adjusted for currency revaluation, the increase was 3.5%).

Since the beginning of the year, loans to individuals have increased by 6.8% to RUB 4.1 trillion. Loans to legal entities have increased by 2.0% since the beginning of the year to RUB 9.5 trillion (adjusted for currency revaluation, the increase was 2.2%).

As a result of faster growth in lending to individuals, the share of retail lending in the Group's total loan book increased to 30%, up from to 29% at the end of 2020.

As of 30 April 2021, total customer funding had increased by 10.2% to RUB 14.1 trillion (adjusted for currency revaluation, the increase was 10.0%).

Since the beginning of the year, customer funding from legal entities has increased by 16.4% to RUB 8.3 trillion on the back of strong growth in current account balances (adjusted for currency revaluation, the increase was 16.3%). Customer funding from individuals has increased by 2.4% to RUB 5.9 trillion since the beginning of the year as a result of a significant increase in savings account balances along with a decrease in funds invested in term deposits (adjusted for currency revaluation, individual customer funding decreased by 2.3%).

The share of customer funding in the Group's total liabilities increased in the first four months of 2021 to 82.3% (up from 78.1% as of 31 December 2020).

As a result of faster growth in customer funding, the Group's LDR ratio decreased to 89.9% as of 30 April 2021 (down from 95.6% as of 31 December 2020).

The Group greatly improved profitability amid strong growth in core banking revenues and stable loan portfolio quality.

VTB Group's net profit amounted to RUB 114.6 billion in the first four months of 2021 and RUB 29.5 billion in April, increases of 182% and 33x year-on-year, respectively.

Net interest income amounted to RUB 196.0 billion in the first four months of 2021 and RUB 50.4 billion in April, increases of 21.2% and 20.0% year-on-year, respectively. Net interest margin was 3.7% in the first four months of 2021 (an increase of 10 bps year-on-year) and 3.7% in April 2021 (unchanged from the same period a year earlier).

Net fee and commission income amounted to RUB 54.5 billion for the first four months of 2021 (an increase of 35.2% year-on-year) and RUB 15.9 billion in April 2021 (an increase of 101.3% year-on-year). The strong growth in net fee and commission income was driven by the Group's expanding transactional business and the steady rise in commissions from the sale of insurance products and brokerage commissions.

The Group's cost of risk was 0.8% in the first four months of 2021 and 1.1% in April, down from 1.6% and 1.7%, respectively, from the same periods last year. At the same time, the provision charge amounted to RUB 33.8 billion for the first four months of 2021 and RUB 11.2 billion in April, decreases of 45.8% and 35.3% year-on-year, respectively.

The Group's NPL ratio was 5.1% as of 30 April 2021, down 60 bps since the beginning of the year. As of 30 April 2021, NPL coverage ratio remained high at 131.3% (compared with 120.6% as of 31 December 2020).

Staff and administrative expenses amounted to RUB 89.1 billion for the first four months of 2021 and RUB 24.2 billion in April, increases of 3.1% and 8.5% year-on-year, respectively.

Rising profitability supported a considerable improvement in operating efficiency: the costs to pre-provision operating income ratio decreased 8.8 p.p. in the first four months of 2021 and amounted to 33.5%.