VTB posts 3Q 2008 Net Loss – 9M 2008 Net result slumps 70%
Russia’s second largest bank, VTB has posted a 3Q 2008 Net Loss of $363 million under IFRS.
The bottom line was a sharp turnaround from the $547 million Net profit made in 3Q 2007, with 3Q provision charges rising to $788 million, compared with $592 million for 1H 2008.
The 3Q figures made for a 9M 2008 Net Profit of $316 million, down 70% from the $1.051 Billion posted over 9M 2007.
The slump came despite total loans increasing 40% to 84.5 Billion over the first 9 months of the year, with customer deposits up more than 41% to $52.6 Billion, and Core income rising 83.8% year on year to $3.8 Billion.
The bank attributes the slump to a sharp deterioration in the operating environment, and a major slowdown in the Russian economy during 3Q 2008, creating ‘exceptional’ market conditions. VTB is implementing a series of measures to reduce costs, including deferral of a move to new administrative headquarters, cuts in administrative expenses and personnel cuts.
Despite the results VTB says it is well placed to weather what it sees as a continued difficult operating environment in the first half of 2009.
Speaking to RT Business about cutting costs VTB CFO, Nikolay Tsekholmsky indicated it wouldn’t necessarily involve slashing employees.
“We will cut costs by optimizing our structure of the costs. Definitely certain business lines we will need to discontinue, like, for instance, we will reduce our focus on mortgages and retail for example. But it doesn’t necessarily mean that we will cut people, we might refocus these people on other products we offer to the market, like consumer grades or some other products we can offer.”