EQS-Regulatory: VTB Group announces IFRS results for 3Q 2016 (news with additional features)
Montag, 14.11.2016 07:55 von DGAP
JSC VTB Bank / Miscellaneous - Medium Priority
VTB Group announces IFRS results for 3Q 2016 (news with additional features)
14-Nov-2016 / 07:54 CET/CEST
Dissemination of a Regulatory Announcement, transmitted by EquityStory.RS,
LLC - a company of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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VTB Group announces IFRS results for 3Q 2016
14 November 2016
VTB Bank ('VTB' or 'the Bank'), the parent company of VTB Group ('the
Group'), today publishes its Interim Condensed Consolidated Financial
Statements as at 30 September 2016, with the Independent Auditor's Report
on Review of these Statements.
Andrey Kostin, VTB President and Chairman of the Management Board, said:
'VTB Group delivered net profit of RUB 34 billion in 9M 2016, more than
double the bottom-line result for 6M 2016. This steady improvement in
profitability reflects the continued recovery in the Group's core revenue
generation.
'Operational efficiency also played an important role in this strong set of
numbers as we started to benefit from the synergies created by the merger
of Bank of Moscow. We expect to achieve further synergies and greater
efficiency going forward, following the recently-approved decision to merge
VTB24 into VTB Bank.
'We are impressed by the development of Post Bank, with more than 3,600
offices opened in 1,075 localities covering 60 Russian regions in under one
year. This rapid expansion is enabling us to significantly enhance the
Group's retail franchise.
'VTB Capital remains Russia's go-to investment banking operation, with
continued leadership across DCM, ECM and M&A league tables for the first
nine months of the year.
'VTB Group as a whole continues to maintain a solid balance sheet and
strong capital ratios, leaving us in an excellent position to support our
clients across all sectors of the Russian economy.'
FINANCIAL AND OPERATING HIGHLIGHTS
Income Statement
RUB billion 9M 2016 9M 2015 Change, 3Q 2016 3Q 2015 Change,
% %
Net interest 310.4 196.0 58.4% 103.4 85.9 20.4%
income
Net fee and 55.9 54.0 3.5% 19.3 21.4 (9.8%)
commission
income
Operating 361.1 293.8 22.9% 124.1 123.0 0.9%
income before
provisions
Provision (146.7) (136.9) 7.2% (43.8) (57.0) (23.2%)
charge*
Staff costs and (171.6) (161.4) 6.3% (55.3) (55.6) (0.5%)
administrative
expenses
Net profit / 34.1 (10.9) - 18.7 6.2 201.6%
(loss)
*Includes provision charge for impairment of debt financial assets and
provision charge for impairment of other assets, credit related commitments
and legal claims.
- Net profit in 9M 2016 was RUB 34.1 billion, supported by improved core
revenue generation as net interest income and net fee and commission
income continued to grow.
- VTB Group net interest income increased by 58.4% year-on-year to RUB
310.4 billion in 9M 2016, as repricing of assets and liabilities
supported a recovery in net interest margin to 3.7% for 9M 2016, up
from 2.4% in 9M 2015. Net interest margin for 9M 2016 was unchanged
from 6M 2016 at 3.7%.
- The Group's Retail business and Transaction banking (as part of
Corporate-Investment banking and Mid-Corporate banking) were the two
main drivers of the 3.5% year-on-year growth in net fee and commission
income to RUB 55.9 billion.
- For 9M 2016, the Group's provision charge grew significantly slower
than net interest income, increasing 7.2% year-on-year to RUB 146.7
billion. The Group's cost of risk, taking into account provisions for
credit related commitments (the annualised ratio of the provision
charge for loan impairments including provision charge for impairment
of credit related commitments to average gross loans and average credit
related commitments), was 1.9% in 9M 2016 compared to 1.8% in 9M 2015.
- In 9M 2016 the Group benefitted from ongoing cost management efforts as
well as synergies from the Bank of Moscow merger. Staff costs and
administrative expenses for 9M 2016 amounted to RUB 171.6 billion, an
increase of 6.3% year-on-year. After the end of the reporting period,
on 2 November 2016, the VTB Supervisory Council voted to merge the
Group's retail banking arm VTB24 into VTB Bank. This is expected to
help the Group achieve significant cost reductions by optimising the
structure of the Group's retail business in Russia and creating
synergies from the merger of operations, including regional networks.
- The Group's annualised costs-to-average assets ratio was 1.8% for 9M
2016, unchanged from 9M 2015, while the ratio of costs to operating
income before provisions improved to 47.5% for 9M 2016 versus 54.9% for
9M 2015.
Statement of financial position
RUB billion 30 Sep 30 Jun 2016 31 Dec 2015 Change in Change in
2016 9M 2016, % 3Q 2016,
or p.p. % or p.p.
Total assets 12,359.2 12,333.5 13,641.9 (9.4%) 0.2%
Loans and 9,409.7 9,362.5 10,110.0 (6.9%) 0.5%
advances to
customers,
including
pledged under
repurchase
agreements
(gross)
Gross loans to 7,288.3 7,319.6 8,150.0 (10.6%) (0.4%)
legal entities
Gross loans to 2,121.4 2,042.9 1,960.0 8.2% 3.8%
individuals
Customer 8,000.9 7,859.1 7,267.0 10.1% 1.8%
deposits
Deposits from 5,077.3 5,009.0 4,383.6 15.8% 1.4%
legal entities
Deposits from 2,923.6 2,850.1 2,883.4 1.4% 2.6%
individuals
NPL ratio 7.2% 7.1% 6.3% 0.9 p.p. 0.1 p.p.
Tier 1 CAR 13.5% 13.3% 12.4% 1.1 p.p. 0.2 p.p.
Total CAR 15.4% 15.1% 14.3% 1.1 p.p. 0.3 p.p.
- The Group's loan book contracted by 6.9% during 9M 2016 due to a
decline in loans to legal entities during the first quarter of 2016
that was driven by repayment of several large FX-denominated loans in
1Q 2016 as well as the strengthening of the Russian ruble in the period
and the corresponding revaluation of loans denominated in US dollars
and other currencies. In 3Q 2016, the loan book grew for the second
quarter in a row, increasing 0.5% despite a 0.1% reduction overall for
the Russian market during the same period.
- Retail lending continued to gain momentum, as loans to individuals
increased by 8.2% during 9M 2016 (up 3.8% in 3Q 2016), and stood at RUB
2,121.4 billion as of 30 September 2016.
- The Group's NPL ratio was 7.2% of gross customer loans, including those
pledged under repurchase agreements (the 'total loan book'), as of 30
September 2016, compared to 7.1% at 30 June 2016 and 6.3% as of 31
December 2015. The allowance for loan impairments was 7.5% of the total
loan book as of the end of 3Q 2016, versus 7.4% on 30 June 2016 and
6.7% as of 31 December 2015. The NPL coverage ratio remained at a
comfortable 102.9% at 30 September 2016, versus 103.9% as of 30 June
2016, and 105.8% as of 31 December 2015.
- Customer deposits grew by 10.1% in 9M 2016, driven by 15.8% growth in
corporate deposits during the period. Growing deposits helped to
further improve the Group's balance sheet, with customer deposits
representing 73% of total liabilities as of 30 September 2016, up from
60% at year-end 2015. As of 30 September 2016, the Group's market
shares in Russia in retail and corporate deposits stood at 11.2% and
24.8%, respectively.
- The Group continued to reduce its reliance on wholesale funding, with
the share of debt securities issued in total liabilities decreasing to
3.9% as of 30 September 2016, down from 4.2% as of 30 June 2016 and
5.1% as of 31 December 2015. Since the beginning of 2016, VTB and its
subsidiaries have made repayments on their international public debt
totalling USD 2.2 billion. After the end of the reporting period, on 17
October 2016, VTB Bank launched an overnight bond programme on Moscow
Exchange. The Group expects that this tool will have a positive impact
on its borrowing costs in the future.
- VTB maintained solid capital adequacy ratios. As of 30 September 2016,
the Group's total and Tier 1 capital adequacy ratios were 15.4% and
13.5%, respectively, versus 15.1% and 13.3% as of 30 June 2016, and
14.3% and 12.4% as of 31 December 2015.
KEY BUSINESS SEGMENT HIGHLIGHTS
VTB Group key segments in 9M 2016
% of the Group Corporate-Investment Retail Mid-Corporate total* banking business banking Assets 44.8% 26.3% 5.3% Loans and 61.5% 24.1% 7.5% advances to customers (net) Customer deposits 39.4% 43.3% 8.5% Revenues from 47.9% 33.2% 6.9% external customers Net interest 25.8% 46.1% 8.3% income Net fee and 19.5% 65.0% 12.4% commission income Provision 38.7% 41.3% 17.4% charge** Net operating 28.9% 63.4% 3.3% income Staff costs and 25.4% 53.2% 9.1% administrative expenses*Before intersegment eliminations **Includes provision charge for impairment of debt financial assets and provision charge for impairment of other assets, credit related commitments and legal claims. - Corporate-Investment banking (CIB) delivered RUB 11.8 billion of net profit in 9M 2016. The Retail business posted a positive net result of RUB 35.1 billion for the period. Conservative lending policies and a cautious business environment continued to put pressure on Mid- Corporate banking during 9M 2016. Net loss of Mid-Corporate banking for 9M 2016 was RUB 8.0 billion. - The loan book in the Retail business continued to grow in 9M 2016, primarily driven by mortgage lending and consumer loans. Mortgage lending growth in 9M 2016 was driven by increasing consumer activity and the continuation of the Government's programme to subsidise mortgage interest rates. The Group has continued to focus on portfolio quality in consumer lending and has seen a significant pickup in consumer activity. VTB Group gross loans to individuals
RUB billion 30 Sep 30 Jun 31 Dec Change in Change in
2016 2016 2015 9M 2016, % 3Q 2016,
%
Gross loans to 2,121.4 2,042.9 1,960.0 8.2% 3.8%
individuals
Mortgage loans 953.9 921.6 875.1 9.0% 3.5%
Consumer loans 937.4 893.4 854.9 9.7% 4.9%
Credit cards 132.7 129.4 124.1 6.9% 2.6%
Car loans 89.2 90.1 100.2 (11.0%) (1.0%)
Other loans 8.2 8.4 5.7 43.9% (2.4%)
- Mortgage loans amounted to 45.0% of the Group's gross loans to
individuals as of 30 September 2016, up from 44.6% as of 31 December
2015. Consumer loans and credit card loans accounted for 44.2% and 6.3%
of the portfolio, respectively, versus 43.6% and 6.3% at 31 December
2015. The share of car loans continued to decline, reaching 4.2% as of
30 September 2016, versus 5.1% at the start of the year.
- The Retail business has been pursuing opportunities to grow fee-based
revenues, in particular through active cross-selling of ancillary
pension and insurance products, including mortgage-linked products from
VTB Insurance and life insurance plans from VTB Life Insurance for
private banking clients. The Retail business's net fee and commission
income reached RUB 36.6 billion in 9M 2016, or 65.0% of the Group's
total.
- In 9M 2016, the Group continued to optimise its Retail business branch
network and staff in line with market trends. As of 30 September 2016,
the Group had around 5,000 retail offices in Russia (including the Post
Bank branch network).
- VTB Capital, the Group's investment banking franchise, topped the
Dealogic rankings for the first nine months of 2016 across DCM and ECM
categories, securing a solid market share in Russia, CIS and CEE.
Highlights include: #1 Russia and CIS International DCM Bookrunner with
market share of 40.7% for Russia and 33.8% for CIS; #1 Russia Domestic
DCM Bookrunner with market share of 31.4%; #1 CEE Total DCM Bookrunner
with market share of 14.3%; and #1 Russia and CIS ECM Bookrunner with
market share of 21.9%. VTB Capital also holds the top position in M&A
by number of transactions in Russia and the CIS according to
Mergermarket rankings for 9M 2016.
- In Mid-Corporate banking (MCB), the Group continued to grow its loan
book conservatively, with a focus on high-quality borrowers. While
interest rates have become more affordable for the MCB customer
segment, customers remain cautious about new borrowing. Throughout 9M
2016, MCB maintained its focus on strict loan origination policies and
risk management standards, as well as on its documentary business with
high quality customers.
Contacts:
Investor relations:
Tel: +7 495 775 71 39
Email: investorrelations@vtb.ru
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Additional features:
Document: http://n.eqs.com/c/fncls.ssp?u=KLFKJVSIAS
Document title: 30 September 2016 Interim Condensed Consolidated Financial
statements
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Language: English
Company: JSC VTB Bank
12, Presnenskaya emb.
Moscow
Russia
Phone: +7 (495) 739-77-99
Fax: +7 (495) 739-77-99
E-mail: info@vtb.ru
Internet: www.vtb.com
ISIN: US46630Q2021
Listed: Foreign Exchange(s) London
Category Code: MSCM
TIDM: VTBR
Sequence Number: 3589
Time of Receipt: 14-Nov-2016 / 07:54 CET/CEST
End of Announcement EquityStory.RS, LLC News Service
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