VTB Bank augmented its financial resources or allocations
VTB Group Boosts 2025 Profit Forecast Amid Easing Monetary Policy
Russian banking giant VTB Group has raised its full-year net profit outlook for 2025, projecting a significant increase from the previously forecasted 430 billion roubles to 500 billion roubles. This upward revision is primarily attributed to the easing of monetary policy and a decline in interest rates, as well as enhanced commission income from cross-selling activities.
The Central Bank of Russia has lowered the key interest rate sharply, from 21% to 18%, with expectations of further reductions aiming for an average key rate of 19.1% by the year's end. This monetary easing positively impacts the bank's margins, capital and liquidity management, and the cost of raising funds, thereby supporting profitability.
VTB's revised growth expectations for its loan portfolio reflect these changing conditions. Loans to legal entities are now projected to grow at a single-digit rate, rather than double digits, while loans to individuals are expected to decline as the bank accelerates repayments. Despite this, the improved margin environment and commission income support the net profit growth forecast.
Meanwhile, in a separate development, Chinese distributors and their Russian dealers are turning to factoring solutions amidst a decline in sales of vehicles to end-users. This trend is particularly prevalent in the automotive market, which is a key driver for factoring solutions growth, according to analytical data.
One of the banks benefiting from this trend is Alpha Bank, whose factoring portfolio reached 490 billion roubles, marking a +57% year-on-year growth. Preliminary data from the Association of Factoring Companies suggests that Alpha Bank holds a 21% market share. The growth in Alpha Bank's factoring portfolio was driven by transactions with large clients from the industrial and metallurgical sectors.
Elsewhere, PSB Bank's financial performance in the first half of 2025 shows a mixed picture. Net interest income increased by 14.1% to 215.8 billion roubles, compared to 189.1 billion roubles in the first half of 2024. However, provisions for risks increased significantly, reaching 47 billion roubles for the first half of 2025, compared to 1.6 billion roubles for the same period last year. As a result, net interest income after provisions decreased by 10% to 168.8 billion roubles, down from 187.5 billion roubles in the first half of 2024. Consequently, PSB Bank's net profit under Russian Accounting Standards for the first half of 2025 was 72.9 billion roubles, a 23.7% decrease from the same period in 2024 (97 billion roubles).
VTB's First Deputy Chairman, Dmitry Pyanov, attributes the increase in net profit to the easing of monetary policy and a decrease in interest rates. VTB has also revised its forecast for credit portfolio growth, expecting it to grow by less than 5% over the year. Corporate loans at VTB are expected to grow by less than 10%, while consumer loans will decrease by 10% or more. After paying dividends, VTB's capital base will be stronger, with capital adequacy ratios above their starting levels.
In summary, VTB Group's increased net profit forecast for 2025 is primarily driven by the easing monetary policy that lowers borrowing costs and enhances net interest margins, alongside a strengthened commission income stream from cross-selling activities. Meanwhile, the growth in factoring solutions is being driven by the automotive market and transactions with large clients from the industrial and metallurgical sectors.
The easing monetary policy, resulting in lowered interest rates, is significantly contributing to finance and business growth, as evidenced by VTB Group's increased net profit forecast for 2025. Meanwhile, factoring solutions, a key driver of business growth, particularly in the industrial and automotive sectors, are witnessing increased adoption among Chinese distributors and their dealers.
