AFP - Russia’s second largest bank VTB yesterday announced a return to profit in the first quarter, saying “stabilisation” in the Russian economy had boosted revenues, although by less than analysts had expected.
Between January and March, state-controlled VTB posted a net profit of 600 million rubles ($9.24 million), after an 18.3-billion-ruble loss in the same period last year.
Analysts contacted by Interfax news agency had predicted higher profits of 5.8 billion rubles, however.
VTB chief Andrei Kostin said the results reflected “the continued stabilisation of business activity in the Russian economy as a whole” after the “volatility seen in the same period a year ago.” In the first quarter of 2015, Russia was suffering a monetary and economic crisis due to falling oil prices and Western sanctions imposed over the conflict in Ukraine, with the ruble plunging in value and the central bank sharply hiking the interest rate.
While Russia remains in recession, recent months have seen signs of stabilisation, particularly in the service sector, although industrial production remains low. In the first quarter, VTB’s income from interest on loans more than doubled to 98.3 billion rubles, while income from fees and commission was up 13 percent at 17.4 billion rubles. This revenue growth led to a 31-percent growth in operating income to 111.1 billion rubles. However, while provision for low-quality loans was down 17 percent, it remained high at 40.6 billion rubles.