Page 170 - RusRPTAug24

Like many in the financial market, VTB made its forecast at the beginning of the year expecting a reduction in the key rate: the bank had set it at 13% by the end of 2024. Now the bank assumes that the rate will remain at 18% until the end of the fourth quarter, noted PyaNovember The Bank of Russia raised the key rate from 16 to 18% at a meeting on July 26, allowing for its growth in the future.
The return on equity (ROE) that VTB expects for the year is now more than 22%, compared to 19% in February. In the first half of the year, ROE reached 24.3%, Pyanov said.
The new net profit forecast consists of several components. RUB 108bn is a one-time effect from the bank's work with blocked assets. Of this figure, RUB 16bn has already been realized by selling part of the assets at a discount to a counterparty, and VTB will allocate the remaining RUB 92bn to a special financial company by the end of the year, Pyanov said.
In January-June, VTB earned just over half of its target under IFRS - RUB 277.1bn, which is 4.4% lower than the record for the first half of 2023.
Also, earlier VTB did not expect significant dynamics of net commission income, forecasting it at the level of 2023 (RUB 217bn), now the state bank estimates the growth of this part of the business by about 10%, said PyaNovember According to the results of the first half of the year, VTB's net commission income amounted to RUB 112.4bn and increased by 15% y/y.
The state bank has improved its cost of risk expectations (the ratio of reserves for credit losses to the size of the loan portfolio) for the entire portfolio to 0.5% from 1% - in the first half of the year, the indicator was 0.6%. The change in the forecast is related to the development of solutions for the repayment of significant amounts by the largest corporate borrowers of VTB's corporate and investment block, Pyanov specified, without disclosing details.
After the sale, HSBC Bank (RR) LLC was renamed Khvoya Bank, according to the Unified State Register of Legal Entities. Frank Media drew attention to this. At the end of May, Expobank closed a deal to purchase 100% of the shares of HSBC Bank (RR) LLC from HSBC Europe BV. It was also reported at the time that the subsidiary would continue its operations under a new name. The sale of HSBC's business in Russia to Expobank became known in 2022. At the end of October 2023, HSBC stopped providing money transfer services to legal entities from Russia and Belarus. In February of this year, Russian President Vladimir Putin signed a decree allowing Expobank to acquire HSBC Bank.
VTB's expenses on import substitution of software from 2021 to the end of 2024 will amount to 90bn rubles. Deputy President and Chairman of the Management Board of VTB Vadim Kulik told Vedomosti about this in an
170 RUSSIA Country Report August 2024 www.intellinews.com