Russia’s VTB bank posts huge loss

Aug 4th, 2009 | By | Category: Rouble News

Russia’s second largest bank, VTB, has announced that it made a loss of 20.5 billion roubles in the first quarter.

The quarterly results compare poorly with the same quarter last year, when VTB revealed a $121 million profit. The first quarter of 2009 was also the first in which VTB announced its results in roubles, rather than dollars.

The bank says the loss was mainly caused by a 49.2 billion roubles provision charge, which was ten times that paid in the same period of 2008. The provision charge totaled 7.1 per cent of its total loan portfolio for the quarter, up from 4.8 per cent at the end of 2008.

The losses came despite its total loan portfolio increasing by 7.5 per cent on a year-on-year basis to 2.8 trillion roubles. Deposits were up by 11 per cent to 1.2 trillion roubles. However, this did little to boost profits as a result of the 42.6 billion roubles loss from its foreign exchange operations.

Andrei Kostin, the president of the bank wanted to reassure investors, stating, “We continue to maintain tight control on costs and risks.”

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