Russian VTB state bank posts six-month record profit
VTB, Russia's second-biggest lender, reported on Thursday record six-month net income of 816 million dollars (636 million euros) as bad loans declined and the economy continued to recover.
The bank posted a net profit of 25.1 billion rubles for the first six months, up from losses of 31.5 billion rubles (1 billion dollars, 800 million euros) for the same period last year, the bank said in a statement.
The state-run bank attributed the improvement to strong performance in its corporate, retail and investment divisions as the Russian economy continues to recover from the worst crisis in at least a decade.
The risk of bad loans receded this year as the Russian banking sector continued to recover, easing the cost of provisions -- an allowance for possible future charges -- which soared to 5.7 percent of VTB's credit portfolio in 2009.
Russia's banking sector has been badly hit by the global economic crisis, with a sharp rise in bad loans therefore bank provisions to offset losses.
"Non-performing loans ratio fell for the first time since the beginning of the crisis and amounted to 9.5 percent of total gross loans, against 9.8 percent at the end of 2009 and 10.2 percent at the end of the first quarter of 2010," the bank said.
"The recovery, however, remains fragile and the second quarter was marked by very challenging market conditions on the back of European sovereign debt problems," the bank added.
© 2010 AFP