Page 68 - bne IntelliNews Russia Country report May 2017

issue was already redeemed in February. This, along with scheduled capital injections of RUB 150bn (RUB 76.7bn was already received in March) in 2017 and the level of liquid assets on the balance sheet (RUB 350bn or $5.3bn) creates a comfortable environment for VEB’s debt repayment.
The former CEO of Russia’s Vneshprombank Larisa Markus has been sentenced to nine years in jail by a Moscow court for extracting about RUB113.5bn (EUR1.83bn), in what has become the biggest case of banking fraud in the country , Tass reported on May 12. Markus pleaded guilty, which was received by the court as an extenuating circumstance. Her brother and co-owner of the bank Georgy Bedzhamov was arrested in Monaco in April last year, but was not extradited to Russia and now reportedly lives in London. At the end of 2016 Vneshprombank was shut down by the Central Bank of Russia with a RUB187bn ($2.3bn) hole in its balance sheet.
Russian state-run lender VTB saw its net profit reach RUB35.3bn (€559mn) in January-April, the bank reported on May 30. While ROAE stood at 7.6%, interest income rose 13.4% year-on-year amid a higher interest margin of 4.1% compared with 3.5%, while fee and commission income was up 11.0% y/y. Loan loss provisions (LLP) rose 6.8% y/y to RUB59.7bn, but CoR increased (1.8% vs. 1.4%) amid contraction in the loan portfolio. The quality of the bank's loan portfolio deteriorated ytd as NPL reached 6.6% compared with 6.4% and the NPL coverage ratio stood at 107.2%. "VTB's profitability showed signs of recovery amid above-average growth in main revenue items compared to operating expenses and other revenues," Gazprombank said in a research note. "Overall, provisioning remained at a stable level."
Russia’s second-largest bank state-controlled VTB Bank reported net IFRS profit of RUB27.6bn (EUR445mn) for the first quarter of 2017 versus RUB0.6bn profit for the same period of last year, the bank said on May 16 .VTB’s net profit exceeded the RUB23bn expectations of analysts surveyed by Reuters. Net income translated into 7.8% return on assets and equity (ROAE) and beat the expectations mainly on the back of non-interest noncommission income (RUB15.3bn), Gazprombank estimated on May 16.
Raiffeisen Bank International (RBI), the second largest bank operating across Central and Eastern Europe by assets, reported that net profit almost doubled year-on-year to €220mn in the first quarter as its Russian business started to bounce back. The better than expected result was helped by a 4.7% y/y rise in net interest income, boosted by the impact of the appreciating ruble on its Russian business, and a 24% fall in provisioning costs for impairments, as RBI’s markets, particularly Russia, continue their recovery. The average prediction of a Reuters poll of analysts had been for net profit of €151mn. RBI shares slipped by 0.18% on May 17 but have soared by 95% over the past 12 months to €22.07.
Iran’s bank card system will be connected to Russia's Mir card payment system from September , the Central Bank of Iran (CBI) said on May 17. The long-awaited move by the CBI would make Russia the first country to accept Iranian bank cards since the Islamic Revolution of 1979, which saw US-based card companies including Visa and MasterCard driven out of Iran. It was not until the 1990s that Iran started issuing its own internal cards, which work under the Shetab (interbank information transfer network) electronic banking clearance and automated payments system. According to a CBI press release,
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