February 26, 2019 / 10:47 AM / 3 months ago

UPDATE 1-Russia's VTB reports 12.7 pct fall in Q4 net profit

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MOSCOW, Feb 26 (Reuters) - Russia’s second-largest lender VTB on Tuesday reported a 12.7 percent fall in fourth-quarter net profit, hurt by lower net interest and net fee and commission income.

VTB said net profit fell to 39.1 billion roubles ($596.11 million) in the October-December quarter from 44.8 billion a year earlier, under International Financial Reporting Standards (IFRS).

The decline in net profit followed a 27 percent year-on-year fall in net fee and commission income as well as a 14 percent drop in operating income before provisions.

VTB said provisions against bad loans fell to 162.4 billion roubles in the quarter from 188.3 billion in the same period of 2017.

The group’s non-performing loan ratio declined to 5.7 percent of gross customer loans at the end of 2018 from 6.9 percent a year earlier, the bank said in its quarterly report.

VTB’s shares dropped 0.9 percent to 0.0359 roubles by 1011 GMT, underperforming the benchmark MOEX index which was down 0.6 percent.

VTB made a net profit of 178.8 billion roubles in 2018, up 49 percent compared with 2017, thanks to “stable performance in core income lines, enhanced cost efficiency and lower provision charges year-on-year,” the bank said.

Looking forward, VTB expects to made around 200 billion roubles in net profit in 2019, its first deputy chief executive Dmitry Olyunin told journalists on a conference call.

“We have entered 2019 with strong momentum, as the profound transformation of our business and new strategic initiatives will continue to drive VTB’s success this year and beyond,” Andrey Kostin, VTB’s president said in the earnings statement.

$1 = 65.5920 roubles Reporting by Andrey Ostroukh, Katya Golubkova and Tatiana Voronova; editing by Jason Neely and Kirsten Donovan

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