VTB calls for international accounting for Russian banks
5 Apr, 2012 15:54
The head of Russia's second largest bank wants all the country's lending institutions to adopt international financial reporting standards (IFRS), to reduce cost.
Andrey Kostin the boss of VTB says the requirement for consolidated financial statements according to Russian Accounting Standards (RAS) is unnecessary.Ekaterina Kondrashov, an analyst for Investcafe research says it’s a sensible measure, and will reduce costs. Reporting according to local and international standards involves different groups of employees. So the banks are now paying twice.“The current IFRS are gradually becoming the "output" for the international capital market, as foreign investors trust financial results reported to IFRS”, Kondrashov adds. Moreover, RAS and IFRS results often differ a great deal. And VTB is a good example.According to the bank’s website VTB Bank’s RAS net profit decline in January-February 2012 was caused by the regulator’s one-off actions related to transfer to the new accounting treatment of derivative products. The decline though had no impact on the Group’s IFRS results. The estimated net profit for the first two months of 2012 corresponds to the year-on-year level and to VTB Group’s approved business plan. VTB says RAS-based financial statements are not representative for the VTB Group as they do not reflect the results of the entire Group. According to VTB Group’s recent results under IFRS, the Group’s net profit for the first nine months of 2011 amounted to RUB 72.6 billion ($2.5 bln).