INTERVIEW: CEO: Russia’s VTB 24 to have net profit in 2015

MOSCOW, Apr 14 (PRIME) -- The net profit of VTB 24, a retail branch of VTB, Russia’s second biggest lender after Sberbank, will shrink significantly in 2015, CEO Mikhail Zadornov told PRIME Tuesday.

“Yes, we expect a net profit, albeit there will be a loss in the first quarter. We hope for a further decrease of interest rates (by the central bank). Furthermore, VTB 24 will ensure a net profit in the second half of the year and overall for the year through several instruments and through more active crediting,” Zadornov said.

The loan portfolio of the bank will fall by 3-4% in 2015 despite strengthening of the ruble, Zadornov said. “Our average annual forecast (for the ruble) for this year is 55-56 rubles per U.S. dollar. But demand for loans is defined not only by the ruble rate, but also by the general economic situation, where there is a decline,” he said.

The bank’s loan portfolio shrank 2.5-3.0% on the year in January–March, Zadornov said, while the non-performing loans rose by 1%.

The government’s low rate mortgage and car loan programs will help VTB 24 this year, Zadornov said. Before the 12% mortgage plan was approved, VTB 24 has seen a 40-50% decrease in demand since February, but as soon as the state program was launched, it received 15 billion rubles worth of applications, he said.

The bank will focus on financing purchases of used cars, he said.

Zadornov said that loan portfolios in the industry will fall 10% in 2015, excluding loans given under state programs. Mortgage portfolios will shrink 3-4%.

Zadornov said that the situation on the deposit market is “good”. In January–March, deposits with VTB 24 grew by 5% to 1.68 trillion rubles. Ruble-denominated deposits make for about 50% of new deposits, he said.

In 2015, the bank expects a deposit inflow of 280-300 billion rubles, Zadornov said in an earlier interview.

The bank has no acquisition plans despite the crisis, but it will consider both organic growth and services to clients of bankrupt banks to widen the client base, he said. Earlier this year, VTB 24 serviced clients of Sudostroitelny Bank (SB Bank) which lost the license, and half of the depositors later switched to services of VTB 24, he said.

VTB 24’s parent holding VTB may partially become a retail bank after it merges with Bank of Moscow, Zadornov said separately.

(52.4220 rubles – U.S. $1)

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