VTB Boosts Capital Reserves and Revises Projections for 2025 Financial Outlook
VTB Bank Anticipates Profit Growth and Expansion in 2025
VTB Bank, one of Russia's largest financial institutions, has announced an increased profit forecast for 2025. According to Dmitry Pyanov, the First Deputy Chairman of VTB, the bank is targeting high profits this year.
The bank's optimistic outlook is centred around a net profit consensus of approximately 374.5 billion RUB for the year. Despite current challenges such as a 49% drop in net interest income due to Russia's central bank rate hikes and growing problem loans, VTB remains optimistic about credit portfolio growth, especially in retail lending.
The bank predicts a revival of retail lending by the end of 2025, aiming for a retail loan portfolio of about 67 trillion rubles, with 63.5 trillion rubles in ruble savings. This indicates a significant focus on consumer loans. However, the bank is expecting expansion mainly in retail lending, but problem loans are rising, though still below previous crisis levels.
The forecasted interest income for 2025 stands at about 4.125 trillion RUB, which is higher than the following year's forecast and suggests expected recovery despite recent declines.
VTB has strengthened its capital base, allowing it to maintain a high level of capital adequacy even after dividend payouts. The bank has also adjusted its dividend payout forecast, emphasizing its regularity as a key part of its strategy.
In addition, VTB aims to complete the integration of RNKB, Post Bank, and BM Bank within the next three years. The integration of these banks is expected to provide an additional boost to VTB's development.
VTB has activated stock trading and seen increased interest from retail investors, confirming its stability in the market. Despite a decrease in citizen loans, the bank predicts a 10% increase in corporate loans.
The easing of monetary policy and reduction in interest rates positively impacted VTB's net interest margin and revenues. However, no new information about VTB's net interest margin or revenues was provided in this paragraph.
In summary, while VTB faces headwinds from rate hikes and economic pressures resulting in falling net interest income and growing problem loans, a key driver for their increased profit forecast in 2025 is the anticipated recovery and growth in retail lending, alongside a stable or improved credit portfolio performance. The integration of RNKB, Post Bank, and BM Bank is expected to provide an additional boost to VTB's development.
What about the bank's plans for investing and expanding their business in 2025? The forecasted growth in retail lending is not just a strategy for profit, but also an opportunity for VTB to increase its investing activities, particularly in consumer loans.
