Page 25 - bne_newspaper_September_29_2017

Weekly Lists
September 29, 2017 www.intellinews.com I Page 25
bne:Banker
VTB triples net profit to RUB68.7bn in first eight months
Russia's second-largest state-owned bank VTB tripled its net IFRS profit in January-August to RUB68.7bn ($1.2bn), the bank said
on September 28. In August alone, however, net profit stood at RUB1bn, down from RUB8.5bn for the same month of last year.
The bank has been struggling in recent years and needed a bail out form the central bank in 2015. It still has some RUB1 trillion of state support in the form of loans from the Central Bank of Russia (CBR).
But it has turned the corner. Previously the analysts saw signs of recovery in VTB's profitability with stable provisioning, continuous increase of net interest margins and effective cost control, being on the way of reaching RUB100bn full-year profit target.
In August provisioning in VTB went up by 27% y/y and 16% m/m to RUB18.6bn, while for eight months overall the cost of forming reserves declined by 22% y/y to RUB111bn.
Credit rating agency Moody’s reaffirmed its positive outlook on Hungary’s banking system on September 28, saying that the growing economy would further improve the quality of loans and support profitability while capital buffers remain stable.
Rising wages and house prices as well as government stimulus will spur loan growth, Moody’s said, adding that demand for large corporate loans was expected to remain modest.
In the second quarter household lending increased to an extent not seen since the crisis, as the value of loan transactions amounted to HUF86bn. The annual average growth in the volume of new loans was 46%, with contributions from both new housing loans (35%) and new personal loans (51%). The growth in lending to households remains healthy, as the risk of overlending is limited by the central bank’s debt cap rules, the MNB said.
Moody’s expects non-performing loans to fall to 9% by the end of 2018 from 14.7% at the end of 2016, driven “mainly by sales and write-offs of problematic loans”. The phase-out of foreign-currency denominated debt has pushed the NPL ratio of households considerably.
Moody's says profitability of the bank sector will likely decline to more moderate levels over the next 12-18 months, after soaring in 2016.
Moody’s remains positive on Hungarian banks