Increased net profit for VTB by 1.2 percent
Russian bank VTB has announced a significant boost in its 2025 profit forecast, with an anticipated revenue of 500 billion rubles. This increase, up from the previous 430 billion, is largely driven by a combination of government tax policy changes and robust economic activities that have stabilized the federal budget [1].
The adjustment in VTB's profit forecast is attributed to the reduction in interest rates and the easing of monetary policy. Consequently, the bank's net interest margin and net interest income have increased [2]. Despite slower credit portfolio growth, VTB's top manager, Dmitry Pyanov, urges not to view this as negative for VTB and the banking sector as a whole [7].
VTB's capital adequacy ratios will remain above their starting levels even after dividend payments, reflecting the bank's strengthened capital base [3]. The average annual interest rate in the new VTB forecast is 19.1% [4]. In addition, VTB's capital efficiency target for 2025 is now 17%, up from the previous 15% [5].
Slower credit portfolio growth during increased capital requirements leads to more even, balanced, and harmonious development, according to Dmitry Pyanov [6]. Corporate loans at VTB are expected to increase by less than 10%, while retail loans will decrease by more than 10% [8].
In other news, VTB plans to complete the merger of three banks within the next three years: RNCB, Post Bank, and BM Bank [9]. Dmitry Pyanov suggested that after the merger and subsequent integration, reorganization, and corporate actions, the marathon may be completed, given his current understanding and the group's current structure [10].
The dollar exchange rate at the end of the year, according to the new VTB forecast, is between 86-90 rubles [4]. Dmitry Pyanov emphasized that VTB's dividend payments for 2024 demonstrate the bank's commitment to regular dividend payments [11].
Controlled credit risk is another key contributing factor to VTB's profitability. Although VTB's non-performing loans increased from 3.9% to 4.8% in early 2025, the volume of bad consumer loans remains projected below peaks seen in previous downturns (5-7% versus 8-10%). This indicates effective risk management limiting profit erosion from bad debts [3].
Despite sanctions and economic challenges, Russia's high public spending alongside increased revenues from both exports and domestic sources have helped stabilize the budget. Such economic stability supports banks like VTB in maintaining profitability [5].
VTB has revised its 2025 credit portfolio growth forecast, with overall growth expected to be less than 5% [12]. While many Russian companies face rising debt servicing costs and some sectors see increased bankruptcies, VTB's profit forecast reflects its ability to navigate these pressures, likely benefiting from favorable fiscal conditions and its role in the "war economy" activity boosting financial flows [1][5].
The rise in VTB's profit forecast can be attributed to a decrease in interest rates and the easing of monetary policy, which has resulted in an increase in the bank's net interest margin and net interest income (2). The bank's strategic capital efficiency target for 2025 is now 17%, demonstrating a focus on improving financial performance (5).
