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.
VTBGroupannouncesIFRSresultsfor2Q2019 VTBBank("VTB" or "theBank"),theparentcompanyofVTBGroup("theGroup"),todaypublishesitsInterimCondensedConsolidatedFinancialStatementsforthethreemonthsandfirsthalfoftheyearended30June2019,withtheIndependentAuditor'sReportonReviewoftheseStatements. AndreyKostin,VTBPresidentandChairmanoftheManagementBoard,said:"Weachievedrobustbusinessgrowthinthefirsthalf, and continued toexpandourmarketsharesin our priority RetailandSMEsegments.Withlendingvolumesup, an improvinginterestrateenvironmentandstablecreditquality, as well as proactiveefficiencymeasures to keep staffcostsandadministrativeexpensesincheck,wearepoisedtopoststrongresultsin2H2019anddeliveronourFY2019netprofittargetofRUB200billion. "Whileremainingfocusedonachieving our financialtargets,wearealsodeliveringonlong-termstrategicgoals,transformingVTBintoanefficient,technology-driven, client-centricbank that demonstratesintensivegrowth supported byinitiatives in the digitaleconomy." FINANCIALANDOPERATINGHIGHLIGHTS IncomeStatement RUB billion | 1H2019 | 1H2018 | Change, % | 2Q2019 | 2Q2018 | Change, % | Net interest income | 213.6 | 238.1 | (10.3%) | 109.4 | 121.8 | (10.2%) | Net fee and commission income | 44.9 | 42.9 | 4.7% | 26.0 | 22.3 | 16.6% | Operating income before provisions | 269.8 | 316.3 | (14.7%) | 132.8 | 163.7 | (18.9%) | Provision charge* | (45.4) | (69.0) | (34.2%) | (30.2) | (48.3) | (37.5%) | Staff costs and administrative expenses | (125.6) | (124.7) | 0.7% | (64.9) | (61.6) | 5.4% | Net profit | 76.8 | 99.8 | (23.0%) | 30.3 | 44.3 | (31.6%) |
*Includesprovisionchargeforimpairmentofdebtfinancialassetsandprovisionchargeforimpairmentofotherassets,creditrelatedcommitmentsandlegalclaims. - Net profit for 1H 2019decreased 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-yearand 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.
- NetinterestincomeamountedtoRUB213.6 billionin1H2019,comparedtoRUB238.1billionayearearlier.Whilelendingvolumesgrewinthefirsthalfof2019, the netinterestmarginfortheperiodamountedto3.3%,comparedto4.1%for1H2018.Fundingcostsremained40bpshigheryear-on-yearat5.3%for1H2019,drivinga25.1%year-on-yearriseininterestexpense,whileinterestincomeroseataslowerpaceof8.3%year-on-yearasreturnoninterest-earningassetswas30bpsloweryear-on-yearat8.4%.
- Netfeeandcommissionincomeroseby4.7%year-on-yeartoRUB44.9billionin1H2019.TheGroup'sretailandmid-corporatebusinesslinescontributedtostrong16.6%year-on-yeargrowthinnetfeeandcommissionincomein2Q2019.
- Thecostofriskgrewto1.1%in2Q2019,inlinewithguidance,andamountedto0.8%in1H2019,downby80bpsyear-on-year.ThelowCoRfor1H2019reflectsa34.2%year-on-yeardropintheprovisioncharge,whichamountedtoRUB45.4 billionfortheperiod.
- TheGroup'scoststooperatingincomebeforeprovisionsratiowas46.6%in1H2019,comparedto39.4%for1H2018,whilethe costtoassetsratiowas1.7%in1H2019comparedto1.9%for1H2018. Theefficiencyratioswere driven by amodest0.7%year-on-yeargrowthinstaffcostsandadministrativeexpenses,toRUB125.6billionin1H2019.
Statementoffinancialposition RUBbillion | 30-Jun-19 | 31-Mar-19 | 1-Jan-19 | Changein6M2019,%orbps | Changein2Q2019,%orbps | Totalassets | 15,055.3 | 14,841.8 | 14,760.6 | 2.0% | 1.4% | Loansandadvancestocustomers,includingpledgedunderrepurchaseagreements(gross),asreported | 11,623.2 | 11,287.9 | 11,423.5 | 1.7% | 3.0% | Grossloanstolegalentities | 8,323.6 | 8,121.9 | 8,435.0 | (1.3%) | 2.5% | Grossloanstoindividuals | 3,299.6 | 3,166.0 | 2,988.5 | 10.4% | 4.2% | Customerdeposits | 10,738.0 | 10,149.0 | 10,403.7 | 3.2% | 5.8% | Depositsfromlegalentities | 6,029.5 | 5,582.2 | 5,995.8 | 0.6% | 8.0% | Depositsfromindividuals | 4,708.5 | 4,566.8 | 4,407.9 | 6.8% | 3.1% | NPLratio | 5.7% | 5.8% | 5.7% | 0bps | (10bps) | LDRratio | 101.5% | 104.0% | 102.8% | (130bps) | (250bps) | Tier1CAR | 12.0% | 12.3% | 12.0% | 0bps | (30bps) | TotalCAR | 13.2% | 13.7% | 13.5% | (30 bps) | (50 bps) |
- TheGroup'sloanbookgrewby1.7%in1H2019toRUB11,623.2billion,as continuedstronggrowthinretaillendingof10.4%outweigheda1.3%declineinthecorporateloanbookduringtheperiod.Corporatelendinggrewin2Q2019by2.5%,whileretaillendinggrowthdeceleratedto4.2%duringtheperiod(+5.9%in1Q2019).TheGroup'smarketshareinRussiaincorporateandretaillendingstoodat19.3%(+70bpsytd)and18.4%(+60bpsytd),respectively.
- TheGroup'sNPLratiowas to5.7%ofgrosscustomerloansasof30June2019,flat compared to1January2019,anddown10 bpsfrom31March2019.Theallowanceforloanimpairmentsattheendofthefirsthalfwas6.3%ofthetotalloanbook,comparedto6.4%asof1January2019and6.5%asof31March2019.TheNPLcoverageratioamounted to 110.8% asof30June2019.
- CustomerdepositsrosetoRUB10,738.0 billionasof30June2019,upby3.2%duringthefirsthalfandbringingcustomerfundingto79.5%oftheGroup'sliabilities,whiletheloans-to-depositratiowas101.5%asof30June2019,comparedto104.0%asof31March2019and102.8%atthestartof2019.
- Depositsfromlegalentitiesroseby0.6%in1H2019,whiledepositsfromindividualsroseby6.8%.TheGroup'smarketshareinRussiaincorporateandretailfundingstoodat20.9%(+20bpsytd)and14.9%(+90bpsytd),respectively.
- TheGroupcontinuedtomaintainalowlevel of relianceonwholesalefunding,withtheshareofdebtsecuritiesissuedintotalliabilitiesatjust2.4%asof30June2019,comparedto2.0%asof1January2019.
- VTBCapitalcontinueditsaward-winningperformance,leadingtheDealogicrankingofRussianInternationalDCMbookrunnersandtheBloombergEasternEuropeBondsBookrunnerrankingfortheperiod.VTBCapitalwasalsonamed#1BrokerageFirminRussiaaccordingtotheannualExtelSurvey2019conductedamonginvestors,andtheVTBCapitalResearchteamranked#2inRussia.
- VTBmaintainedsolidcapitallevelsduringthefirstquarter,withthetotalandTier1capitaladequacyratiosamountingto13.2%and12.0%,respectively,asof30June2019,comparedto13.5%and12.0%,respectively,asof1January2019.
Attachment
Document title: VTB 1H'2019 IFRS report
Document: http://n.eqs.com/c/fncls.ssp?u=KTIYMWPCRT
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VTB BANK 
