VTB discusses its recent achievements and offers future projections
VTB Group, one of Russia's largest banks, has revised its full-year net profit forecast for 2025, aiming to achieve 500 billion roubles, an increase from the earlier forecast of 430 billion roubles. This revision comes amidst improved earnings from cross-border commission income, despite a drop in quarterly profit.
Regarding credit portfolio growth, there is no specific numerical forecast available, but VTB and other Russian banks face challenges such as increased problem loans in certain sectors like coal, metallurgy, and construction. VTB CEO Andrey Kostin has highlighted the presence of problematic loans backed by collateral in coal and other industries, indicating cautious credit portfolio management amid economic restructuring needs.
In a separate development, VTB announced its integration plan for the next three years, which includes the merger with banks RNKB, Post Bank, and BM Bank. Dmitry Pyanov, VTB's First Deputy Chairman, anticipates the completion of this integration, reorganization, and corporate actions given the current structure of the group.
Despite the slow growth in the credit portfolio, Pyanov encourages not to view this as a negative. He attributes this growth to the easing of monetary policy and a decrease in interest rates, which is expected to contribute to the bank's overall performance.
It's important to note that the integration of RNKB, Post Bank, and BM Bank is not related to the revised net profit forecast or return on equity for 2025. Furthermore, this integration is not expected to influence the forecasted USD exchange rate or average annual interest rate for VTB.
The completion of the integration of the mentioned banks is considered a significant milestone in the current understanding of VTB's plans for the next three years. VTB has adjusted its forecast for the growth of its credit portfolio, expecting it to grow by less than 5% over the year.
As part of its broader strategy, the integration of these banks is a crucial part of VTB's ongoing strategy, which includes various corporate actions. The bank's net profit under IFRS for the first six months of 2025 was 280.4 billion rubles, a 1.2% increase from the same period in 2024.
In summary, VTB expects a stronger net profit in 2025 compared to earlier guidance, but the bank is contending with rising credit risks in specific sectors, impacting cautious portfolio growth. The bank's integration plan, which includes the merger with RNKB, Post Bank, and BM Bank, is a significant part of its long-term strategy.
In light of VTB's integration plan involving RNKB, Post Bank, and BM Bank, the bank is expanding its business horizons for the next three years. This strategic move towards merging banks is a crucial part of VTB's long-term strategy, which also includes careful managing of its credit portfolio in the face of increased problem loans in certain sectors like coal, metallurgy, and construction, while aiming to achieve 500 billion roubles in full-year net profit in 2025, through investments and improved earnings from cross-border commission income.
