Page 62 - RusRPTJuly18

Russia's second-largest state bank VTB increased its net income by 57% year-on-year to RUB12.1bn ($194mn) in April 2018, making a return on equity (ROE) of 10.1%. VTB needed large government bailouts during the worst of the “silent crisis” in 2015-2106 but has since returned to profit on the back of a general economic recovery. The bank's net interest income rose 7.8% y/y to RUB40.2bn, with makes a net interest margin of 4.1%, while net fees and commission income added 29% to RUB8.5bn. VTB ended 2017 by exceeding analysts’ expectations by a large margin with strong fourth-quarter results . The bank also promised to raise dividends , and started shedding non-core assets . "On the positive side the bank's total revenue increased by an impressive 34% y/y to RUB60.8bnm and opex is down," Aton Equity commented on April results on June 1. VTB's operating costs declined 3% in the reporting month. "However, it was offset by a spike in provisioning," Aton warns. The bank's provision charge jumped 90% to RUB26bn with implied cost of risk (CoR) at 3.4% (1.8% for 2017).
Russian development bank Vnesheconombank (VEB) will get a part of the RUB3 trillion ($47bn) state infrastructure fund in its capital, Vedomosti and Interfax reported on June 15 citing the newly appointed head of VEB Igor Shuvalov. VEB is being beefed up under Kremlin insider Shuvalov and made into a key player in the state investment drive planned in Vladimir Putin's May Decrees . Recent reports suggested that VEB will also be allowed to become a major player on the pension fund market . Previously Siluanov said that the fund will formed through additional borrowing of about RUB3.5 trillion, mainly with OFZ federal bonds.
Troubled Financial Corporation Otkritie bank wants to sell a stake of up to 20% in 2021 , the bank’s management said on June 8. The Central Bank of Russia (CBR) took Otkritie over last year and two other major banks after they were downgraded by the domestic ARCA ratings agency and saw massive outflows of funds held on their accounts by state-owned enterprises (SOE). Instead of closing the banks and being forced to reimburse depositors to the tune of hundreds of millions of dollars, the regulator chose to take the banks over to try and rehabilitate them. Now the central bank, which has found itself in the awkward position of owning banks it is supposed to supervise, wants to off load its ownership. “It is important for us to be attractive for an external investor, a buyer, by 2021 so we can sell 15-20% of shares,” Otkritie’s CEO Mikhail Zadornov said. Zadornov, presenting the bank’s strategy at a banking forum in St Petersburg, said Otkritie would like to sell its shares at a price of at least 1.3 times the capital the bank has at the end of 2020, Reuters reports. Ksenia Yudayeva, first deputy governor central bank and the head of the supervisory board at Otkritie, said shares in Otkritie will be offered in several blocks. She said Otkritie was not looking for a strategic investor to buy those shares. Yudayeva said Otkritie’s plan for the next few years would be to focus on lending to small and medium businesses. A successful implementation of the strategy should help Otkritie’s banking business post a net profit of RUB68bn ($1.08bn) in 2020, Zadornov said. The bank’s return on equity, an indicator that shows how much profit the company generated from the money invested by its shareholders, is set to increase to 18% in 2020 from zero in 2018, the bank’s presentation showed. In the first five months of 2018, the bank made RUB5.4bn in net profit, Yudayeva said.
Russia's second-largest bank VTB is close to acquiring Vozrozhdenie Bank of embattled bankers Dmitri and Alexei Ananyevs, Vedomosti s aid on
RUSSIA Country Report July 2018 www.intellinews.com