February 26, 2020 / 8:18 AM / a month ago

CORRECTED-UPDATE 1-Profits jump at Russia's VTB as bad loans shrink

(Corrects currency to roubles from euros in second paragraph)

MOSCOW, Feb 26 (Reuters) - Russia’s second-largest lender VTB reported a 13% increase in net profit last year, the bank said on Wednesday, slightly exceeding its own target, as provisions for bad loans dropped.

VTB said 2019 net profit hit 201.2 billion roubles ($3.08 billion), a record high, and a touch above the 200 billion roubles it was targeting.

VTB’s profit rose as its provisions against bad loans fell to 103.3 billion roubles in 2019 from 154.6 billion roubles in 2018.

The share of non-performing loans shrank to 4.7% as of end-2019 from 5.7% in late 2018, VTB said.

VTB shares rose shortly after the financial results were released but then pared gains and slipped to 0.047 roubles, down 0.97% on the day as of 0810 GMT.

In the fourth quarter, VTB’s net profit rose 76% compared with a year ago to 73.2 billion roubles.

Net interest income rose 7.2% year-on-year in the fourth quarter of 2019 to 116.8 billion roubles, while its return on equity - a measure of profitability - increased to 17.9% from 11.0% in the same period of 2018.

Fourth-quarter provisions against bad loans more than halved to 25.5 billion roubles from a year ago.

The management board of VTB will recommend paying out 50% of the company’s 2019 net income in dividends in two installments, its board member Dmitry Pyanov said on Tuesday ($1 = 65.3110 roubles) (Reporting by Tatiana Voronova and Maxim Rodionov Writing by Andrey Ostroukh and Polina Devitt, editing by Louise Heavens and Carmel Crimmins)

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