August 8, 2019 / 9:26 AM / 4 months ago

Russia's VTB Q2 net profit down by a third on lower interest income

MOSCOW, Aug 8 (Reuters) - VTB, Russia’s second biggest lender, posted a 31.6% fall in its second quarter net profit to 30.3 billion roubles ($465.3 million), hit by lower net interest income, the bank said on Thursday.

The bank’s net profit for the first six months of the year was at 76.8 billion roubles, down by 23% from the same period a year ago, also under pressure from weaker net interest income which was down by 10.3% over that period.

Dmitry Olyunin, VTB first deputy chief executive, told reporters that the bank’s results in the first half of the year were under pressure from the central bank’s decision to raise the key rate at the end of last year.

In December, Russia’s central bank raised the rate by 25 basis points to 7.75 percent, seeking to keep a lid on rising inflation and offset pressure on the rouble. The central bank has cut the rate in June and then again in July.

Olyunin said that the bank has maintained the lending rates despite the key rate increase, as it did not want to lose the loan portfolio dynamics. VTB corporate lending was down 1.3% for the first six months but retail loans were up by 10.4%.

VTB Chief Executive Andrey Kostin said in a statement that the bank kept its net profit forecast for 2019 unchanged at 200 billion roubles, expecting a strong second half of the year given changes in interest rates, among other factors.

VTB shares were down by 1.2% at 0920 GMT while the overall market was up by 1%. ($1 = 65.1175 roubles) (Reporting by Tatiana Voronova Writing by Katya Golubkova Editing by Keith Weir)

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