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EARNINGS POLL-Russia's VTB Q2 net profit seen up 55 pct
September 11, 2013 / 9:01 AM / 4 years ago

EARNINGS POLL-Russia's VTB Q2 net profit seen up 55 pct

* VTB Q2 results expected on Thursday, Sept. 12
    * Net profit average forecast 16 bln roubles
    * Results seen underperforming full-year guidance

    MOSCOW, Sept 11 (Reuters) - VTB, Russia's No.2 bank, is expected
to report a 55 percent year-on-year rise in second-quarter net profit on the
back of a growing loan portfolio, but a rise in bad loan provisions and weak
income from trading operations could put a question mark over its full-year
profit guidance.
    Russian banks have piled into high-margin consumer lending as demand for
corporate credit slowed. A slowing economy, however, has raised fears that
people will struggle to repay their debts, prompting lenders to set aside more
money to cover risks on high-interest loans.
    VTB's net profit was seen at 16 billion roubles ($486 million), according to
an average response of 10 analysts, compared with 10.3 billion in the same
period of 2012, with its loan portfolio tipped to rise 20 percent year-on-year. 
    But the bank's bad loan provisions were expected to soar to 23 billion
roubles from 12 billion the year earlier, putting a drag on earnings. 
    Sberbank, Russia's top lender, last month said its profit would be
close to the lower-end of initial guidance after higher provisions weighed on
quarterly results. 
    "We expect weak numbers - another quarter of elevated provisioning, losses
from securities," BofA Merrill Lynch said in a preview note, adding it cut its  
full-year 2013 net income forecast to 82 billion roubles, 18 percent below the
bank's own target of at least 100 billion roubles.
    Andrei Kostin, VTB's chief executive, told reporters in St Petersburg last
week that the bank was sticking to its full-year forecast. Still, analysts
remain wary.
    "VTB's results should indicate that the bank is substantially behind
schedule to achieve its year-end net income target. We note that reaching this
goal is gradually becoming increasingly challenging and do not rule out the bank
revising its forecasts," said analysts at Gazprombank.
    However, Gazprombank added "a few trump cards in VTB's pocket" included
possible private equity deals, including a potential sale of Tele2 Russia - the
country's No.4 mobile operator that VTB bought in April from Sweden's Tele2
 for $3.55 billion. 
    Below are VTB's second-quarter forecasts in billion of roubles.
          
           Net profit  Provisions  NII*   Op.income   Costs    Loans  
 Average      16.0        23.4     74.0      95.7      52.3    5,184 
 Q2 2012      10.3        11.9     58.4      66.9      44.6    4,328 
 Q1 2013      15.7        22.0     73.8      92.9      49.2    4,948 
 *Net interest income 
 Contributors included BofA Merrill Lynch, Goldman Sachs, Citi, Sberbank CIB,
UBS, Alfa Bank, BCS, Gazprombank, Metropol, Sovlink, Uralsib.
 ($1 = 32.9432 Russian roubles)

 (Reporting by Oksana Kobzeva; additional reporting by Denis Pinchuk; Writing by
Maria Kiselyova; Editing by Megan Davies)

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