Russia’s VTB Bank Sees Lending Income Collapse Amid War Pressure

In the midst of President Vladimir Putin’s economic pressures in the Ukrainian War, the second largest bank of Russia, Russia’s second largest bank, sees a constant deterioration in the profits caused by stability in the bank.

According to the VTB’s net interest income, July 31 Conclusion presentation, the last decline for the basic credit operation fell by 49% from six months to June, according to the July 31 conclusion presentation.

Such a decrease between worldwide comparable loans is rare, and the senior executives in the bank show that data does not reflect the real seriousness of the situation, according to people who are familiar with people who demand anonymity discussing special issues.

The lending income underlines the difficulties of the Russian economy to a summit in Alaska in search of an agreement to end the war by the Russian economy Putin and US President Donald Trump. The White House increases the pressure on the Kremlin, and the latest moves, including Russian oil purchases, to double the tariffs on India.

Net interest income is the difference between the interest earned by a bank and paying for deposit. At a time when Russia’s official comparison rate rose to a 21%summit, the fall underlines the difficulties faced by the bank’s credit book.

According to the results, the bank still made a net profit of 280 billion rubles in the period. This has helped great gains in the trade of financial vehicles, a factor that can not provide reliable return in the long run.

VTB said that net interest income has fallen because an increase in interest rates from 7.5% to 21% “so important and so extended that it affected NII so financially”.

The top executives in the bank were rejected as “fantasy, simple and simple”, which the data may not reflect the real seriousness of the situation. “We regularly do stress tests and all necessary job analyzes and we are absolutely positive,” he said.

In June, Bloomberg reported that banking officials saw a reliable systemic risk of systemic crisis in the next 12 months, because lenders were increasingly concerned about the bad debt level of their balance sheets. When these fears were asked for reducing the interest rates of the Central Bank of Russia to 18% last month, Governor Elvira Nabiullina insisted that there is not a reason to be worried ”.

The Russian government trusted banks to finance war efforts, especially those who belong to the state, especially those who belong to the state. Moscow required lenders to give preference to the military-industry sector, many of them were taken into account in public statistics due to restrictions on the publication of data-related expenditures.

The major increases in the government’s expenditures and measures to support influenced businesses affected by international sanctions were subjected to increased inflation in Russia and encouraged the Central Bank to break the interest rates of 21% to cool the overheated economy. As the interest rates increased, banks saw an increase in the lack of payment and restructuring of loans.

Last month, Nabiullina rejected a systemic crisis risk at a financial conference as “absolutely unfounded ve and pointed to 8 trillion ruble capital reserves as evidence that Russia’s banking system was well isolated against shocks. The Central Bank also said that it could release what is known as a macoprudedent capital buffer and allow banks to absorb losses and work temporarily with lower capital rates if necessary.

Nabiullina has been determined to re -capitalize unsuccessful loans and to clear Russia’s banking system in the past. In 2017, the Central Bank spent at least 1 trillion rubles to save three major private banks, Otkritie, Promsvyazbank and B & n Bank said it was necessary to save the financial system.

VTB is one of the 13 major lenders who are systemicly considered systemic by the Central Bank. According to the existing and former authorities and documents seen by Bloomberg, some senior VTB executives have specifically pointed out the collapse of net interest income in net interest income, that credit books are worse than other title statistics.

Public data about VTB’s non -performance loans show some reasons for concern, but argue that any crisis is close. The non -performance loan rate was 4.1% at the end of June, which pointed out a percentage percentage higher than one percent higher than one year and a lower increase than the previous crisis periods.

The official risk cost, which is an important indicator of the VTB’s credit quality, rose from 0.6% to 0.8% annually and has doubled from 1.2% to individuals. Failure to pay loans from individuals has increased by 32% to date. He argues that the bank has difficulty in paying retail loans, especially at a time of increasing mortgage defaults.

However, the authorities stated that in the case of an institutional portfolio, it is difficult to obtain a correct picture of the real status of the credit book, the lack of visibility on the debt on war.

In addition, the inconsistency between the falling interest income and the total net profit figure increased by 1.2% annually in six months by the end of June.

Half -year applications, wage and commission income and transactions of profits, probably in the currency, more variable income flow than loans show that other yarns. This uncertainty has been proven in the second quarter abdomen for 2025, which decreased by 10% annually.

The 2022 rule means that Banks Olofsgård of the Stockholm Institute of Transition Economics, a leading research center in the Russian economy, mask masking the level of financial distress in the economy ”. “If net interest income decreases so much, it would be surprising and difficult for a bank’s profit to increase.”

VTB also operates under pressure from capital rates. In September 2024, the Russian media reported that the basic capital adequacy ratio fell to 5.31%close to the regulatory minimum level and provided the lowest rate of all major banks and that analysts may need additional capital. Since then, capital buffers have been stabilized, although they have historically weak. In July, Bloomberg said that in July they specially discussed how several systemic banks should be rescued or re -capitalized.

People also said the decline in VTB’s lending operation seems worse than some of its major competitors. According to IFRS files published in July, Russia’s largest bank Sberbank saw an increase of 18.5 to 1.7% to 1.7 trillion rubles in the first half of 2025 compared to the previous year. Sberbank’s consequences have been an increase in interest income in the last two years and show a much better basic performance than VTB.

In a press release accompanying the first half report, VTB said the net interest income was “under pressure .. However, he said that the loan figure that does not perform is “low”. He said that this was the “key beneficiary of monetary expansion ve and increased the profit forecast for 2025.

With the help of Tom Metcalf.

This article was created from an automatic news agency feeding without changing the text.