Latest news with #DmitryPyanov
Reuters
2 days ago
- Business
- Reuters
Russian central bank sees no risk of looming banking crisis
ST PETERSBURG, Russia, July 3 (Reuters) - The Russian central bank sees no risk of a looming crisis in the country's banking system as rising bad debts are well covered by banks' $100 billion in capital, Governor Elvira Nabiullina said on Thursday. The share of bad and restructured loans in Russian banks' portfolios has been rising, as more companies struggle to refinance their debts at interest rates that have jumped above 30% as a result of the central bank's tight monetary policy. Some economists and bankers have recently raised concerns about the health of the banking system in light of the growing share of bad debts. The last time the central bank had to bail out a major Russian bank was in 2017. "Having full information about the banks, as the authority overseeing them, I can state with complete confidence that these concerns are absolutely unfounded," Nabiullina told reporters. "The banking system is well capitalized, despite the fact that this capital is unevenly distributed across the banking sector. The capital buffer is substantial at 8 trillion roubles ($101.18 billion)," Nabiullina said. Russia's second-largest bank, VTB, reported that the share of non-performing loans (NPLs) in its portfolio that have not been serviced for over 90 days reached 5% in May. During the financial turbulence of 2014-16, VTB's share of such loans was as high as 10%. VTB's First Deputy CEO, Dmitry Pyanov, said the share of NPLs could rise to between 6% and 7% within the next few months, but stressed that this was still far from peak levels. VTB estimated the share of restructured corporate loans at 3%. Nabiullina said the continued strong profits reported by the banking sector this year indicate that banks have not been forced to increase provisions to cover the rising share of bad loans. "Banks are not significantly increasing provisions. If the share of bad loans were rising, the share of provisions would also increase, which would lead to a decrease in profits. But banks' profits are comparable to last year's," she said. The central bank introduced an additional requirement on provisions, called a "countercyclical buffer", at 0.25% of total assets in February and raised it to 0.5% from July 1. It is considering a further increase to 1%. ($1 = 79.0705 roubles)
Reuters
04-07-2025
- Business
- Reuters
Exclusive: Russia's VTB to gain billions of roubles if interest rates come down, CFO says
ST PETERSBURG, Russia, July 4 (Reuters) - Every 1% cut in central bank interest rates gives Russia's VTB Bank an extra 20 billion roubles ($250 million) in net profit, CFO Dmitry Pyanov told Reuters, which benefits the government as the state-owned lender plans to distribute 50% of its profits via dividends - half of it to the state. Russia's benchmark interest rate remains extremely high at 20%, discouraging borrowers and hurting banks' loan books. While the central bank cut the rate last month from a more than 20-year-high of 21%, pressure is growing on it to bring rates down faster, with government officials and business leaders fretting over the risks of a recession. Among Russian banks VTB ( opens new tab has the highest proportion of loans on floating rates, so high official rates raise the risk it faces of more defaults or debt restructuring moves, which in turn can push up its capital requirements, while lower rates stand to benefit the bank's bottom line. "VTB Bank is a main beneficiary of the key rate cut," Pyanov told Reuters on Thursday at a financial forum in St Petersburg. "We suffer most of all during a period of its increase and will realise positive interest rate risk when the rate decreases." "A one percentage point rate cut gives us 20 billion roubles of net profit." President Vladimir Putin in June ordered that VTB's dividend payments be used to finance United Shipbuilding Corporation, which has been under VTB's management since 2023, and has state contracts in the defence sector. The state owns more than 60% of VTB. High interest rates have indeed stalled investment and encouraged companies and consumers to hold money on deposit. Corporate and consumer lending is slowing and the central bank has noted a deterioration in credit quality, although it says the situation is not yet critical. A survey of participants at a financial congress in St Petersburg this week pinpointed the key risk factors as corporate credit concerns and interest rate risks for banks. Pyanov said he did not expect a banking crisis and saw no banks in need of a bailout. Dividends from state companies are a major source of revenues for Russia's budget, which is operating at a deficit of 1.5% of GDP as Moscow diverts vast sums to the defence sector for its conflict in Ukraine and grapples with reduced energy revenues from lower oil prices this year and a strong rouble. Shareholders of top lender Sberbank ( opens new tab approved a $10 billion dividend payout this week. VTB surprised the market in April by announcing its first dividend since the start of the conflict in Ukraine, having slumped to a $7.7 billion sanctions-induced loss in 2022. The total payout of 275.75 billion roubles comes on the back of record profits in 2024 and though a decline is expected this year, profits could once again surpass 500 billion roubles, Pyanov said. Depending on capital adequacy rules that the central bank may adjust, Pyanov said VTB would work hard to keep dividend payments at 50% of net profit for the years to come. Pyanov also noted how the departure of Western capital and the emergence of retail investors as a dominant force in the Russian stock market since the start of the conflict in Ukraine had influenced VTB. Dividends are now key to maintaining shareholder value in Russia, he said. "With such a dominant retail investor, everyone wants dividends," Pyanov said. ($1 = 79.0000 roubles)
Yahoo
04-07-2025
- Business
- Yahoo
Exclusive-Russia's VTB to gain billions of roubles if interest rates come down, CFO says
By Elena Fabrichnaya ST PETERSBURG, Russia (Reuters) -Every 1% cut in central bank interest rates gives Russia's VTB Bank an extra 20 billion roubles ($250 million) in net profit, CFO Dmitry Pyanov told Reuters, which benefits the government as the state-owned lender plans to distribute 50% of its profits via dividends - half of it to the state. Russia's benchmark interest rate remains extremely high at 20%, discouraging borrowers and hurting banks' loan books. While the central bank cut the rate last month from a more than 20-year-high of 21%, pressure is growing on it to bring rates down faster, with government officials and business leaders fretting over the risks of a recession. Among Russian banks VTB has the highest proportion of loans on floating rates, so high official rates raise the risk it faces of more defaults or debt restructuring moves, which in turn can push up its capital requirements, while lower rates stand to benefit the bank's bottom line. "VTB Bank is a main beneficiary of the key rate cut," Pyanov told Reuters on Thursday at a financial forum in St Petersburg. "We suffer most of all during a period of its increase and will realise positive interest rate risk when the rate decreases." "A one percentage point rate cut gives us 20 billion roubles of net profit." President Vladimir Putin in June ordered that VTB's dividend payments be used to finance United Shipbuilding Corporation, which has been under VTB's management since 2023, and has state contracts in the defence sector. The state owns more than 60% of VTB. High interest rates have indeed stalled investment and encouraged companies and consumers to hold money on deposit. Corporate and consumer lending is slowing and the central bank has noted a deterioration in credit quality, although it says the situation is not yet critical. A survey of participants at a financial congress in St Petersburg this week pinpointed the key risk factors as corporate credit concerns and interest rate risks for banks. Pyanov said he did not expect a banking crisis and saw no banks in need of a bailout. DIVIDENDS PLAY KEY ROLE Dividends from state companies are a major source of revenues for Russia's budget, which is operating at a deficit of 1.5% of GDP as Moscow diverts vast sums to the defence sector for its conflict in Ukraine and grapples with reduced energy revenues from lower oil prices this year and a strong rouble. Shareholders of top lender Sberbank approved a $10 billion dividend payout this week. VTB surprised the market in April by announcing its first dividend since the start of the conflict in Ukraine, having slumped to a $7.7 billion sanctions-induced loss in 2022. The total payout of 275.75 billion roubles comes on the back of record profits in 2024 and though a decline is expected this year, profits could once again surpass 500 billion roubles, Pyanov said. Depending on capital adequacy rules that the central bank may adjust, Pyanov said VTB would work hard to keep dividend payments at 50% of net profit for the years to come. Pyanov also noted how the departure of Western capital and the emergence of retail investors as a dominant force in the Russian stock market since the start of the conflict in Ukraine had influenced VTB. Dividends are now key to maintaining shareholder value in Russia, he said. "With such a dominant retail investor, everyone wants dividends," Pyanov said. ($1 = 79.0000 roubles) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
04-07-2025
- Business
- Yahoo
Exclusive-Russia's VTB to gain billions of roubles if interest rates come down, CFO says
By Elena Fabrichnaya ST PETERSBURG, Russia (Reuters) -Every 1% cut in central bank interest rates gives Russia's VTB Bank an extra 20 billion roubles ($250 million) in net profit, CFO Dmitry Pyanov told Reuters, which benefits the government as the state-owned lender plans to distribute 50% of its profits via dividends - half of it to the state. Russia's benchmark interest rate remains extremely high at 20%, discouraging borrowers and hurting banks' loan books. While the central bank cut the rate last month from a more than 20-year-high of 21%, pressure is growing on it to bring rates down faster, with government officials and business leaders fretting over the risks of a recession. Among Russian banks VTB has the highest proportion of loans on floating rates, so high official rates raise the risk it faces of more defaults or debt restructuring moves, which in turn can push up its capital requirements, while lower rates stand to benefit the bank's bottom line. "VTB Bank is a main beneficiary of the key rate cut," Pyanov told Reuters on Thursday at a financial forum in St Petersburg. "We suffer most of all during a period of its increase and will realise positive interest rate risk when the rate decreases." "A one percentage point rate cut gives us 20 billion roubles of net profit." President Vladimir Putin in June ordered that VTB's dividend payments be used to finance United Shipbuilding Corporation, which has been under VTB's management since 2023, and has state contracts in the defence sector. The state owns more than 60% of VTB. High interest rates have indeed stalled investment and encouraged companies and consumers to hold money on deposit. Corporate and consumer lending is slowing and the central bank has noted a deterioration in credit quality, although it says the situation is not yet critical. A survey of participants at a financial congress in St Petersburg this week pinpointed the key risk factors as corporate credit concerns and interest rate risks for banks. Pyanov said he did not expect a banking crisis and saw no banks in need of a bailout. DIVIDENDS PLAY KEY ROLE Dividends from state companies are a major source of revenues for Russia's budget, which is operating at a deficit of 1.5% of GDP as Moscow diverts vast sums to the defence sector for its conflict in Ukraine and grapples with reduced energy revenues from lower oil prices this year and a strong rouble. Shareholders of top lender Sberbank approved a $10 billion dividend payout this week. VTB surprised the market in April by announcing its first dividend since the start of the conflict in Ukraine, having slumped to a $7.7 billion sanctions-induced loss in 2022. The total payout of 275.75 billion roubles comes on the back of record profits in 2024 and though a decline is expected this year, profits could once again surpass 500 billion roubles, Pyanov said. Depending on capital adequacy rules that the central bank may adjust, Pyanov said VTB would work hard to keep dividend payments at 50% of net profit for the years to come. Pyanov also noted how the departure of Western capital and the emergence of retail investors as a dominant force in the Russian stock market since the start of the conflict in Ukraine had influenced VTB. Dividends are now key to maintaining shareholder value in Russia, he said. "With such a dominant retail investor, everyone wants dividends," Pyanov said. ($1 = 79.0000 roubles) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
25-02-2025
- Business
- Reuters
Russia's VTB Bank reports record profits for 2024, recommends no dividend
MOSCOW, Feb 25 (Reuters) - Russia's second-largest lender VTB Bank ( opens new tab made record profits of 551.4 billion roubles ($6.3 billion) in 2024, its chief financial officer said, but will not recommend a dividend as high interest rates and new regulation dampened this year's earnings outlook. The state-owned lender has now reported successive years of record annual profits, rebounding from a sanctions-induced loss of 667.5 billion roubles in 2022 when it was cut off from the SWIFT global financial messaging system after Moscow sent troops into Ukraine three years ago. High interest rates boosted banks' net interest margins, but with the Russian central bank's key rate now at 21%, lending growth is starting to slow as companies cut back on investment and people prefer to hold funds on deposit. Despite the 27.6% year-on-year surge in net profit, VTB's management is recommending that no dividends be disbursed from the 2024 results, Chief Financial Officer Dmitry Pyanov told reporters in comments cleared for publication on Tuesday. "The shareholder takes the dividends decision, but we, as management, will recommend against paying dividends on 2024 results due to the likely unprecedented number of simultaneously emerging negative factors affecting our ability to increase capital adequacy," Pyanov said. Pyanov named the high key rate, harsher tax policy and tighter regulation, including a surcharge for banks when issuing new loans to large firms with a high debt burden, among those negative factors. As a result, profits this year are set to fall to around 430 billion roubles, Pyanov said, before bouncing back to around 650 billion roubles the year after. Conflict resolution regarding Ukraine is not included in the bank's base case forecast, he added. U.S. President Donald Trump is seeking a swift deal to end the conflict in Ukraine, fuelling speculation that sanctions imposed against Russia could be eased. Pyanov expects the bank's overall loan portfolio growth to slow to 5% to 6% this year, largely due to more profitable corporate loans. "This will be a year of credit manoeuvre for us," Pyanov said. "We will purposefully reduce loans to individuals." ($1 = 87.7455 roubles) Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here.
