1q2019 ifrs results eng 30052019 1722 - vtb...107.6 52.5 160.1 12m'18. 1q’2019 results |...

1Q’2019 Results

May 30, 2019

Dmitry PianovMember of the Management Board

Leonid VakeyevHead of Investor Relations

11Q’2019 Results | 30-May-19

1Q’19 KEY HIGHLIGHTS

ON TRACK TO DELIVER

ON 2019 GUIDANCE

Staff costs and

administrative expenses

NOI 137.0 RUB bn

Net profit 46.5 RUB bn

1Q’19

▲6%Individuals

CONTINUING TO BUILD

STRONGER RETAIL

COMBINATION OF

COST CONTROL AND

REALISED SYNERGIES

RESULTED IN LOWER

COST BASE

MARGINS WERE

UNDER PRESSURE

DUE TO MARKET

HEADWINDS

NIM 3.2%

CAPITAL LEVELS

SUFFICIENT TO FUND

FURTHER GROWTHTier I 12.3%

+ 30 bp

+20 bp

Total 13.7%

Yield on assets

Cost of liabilities

-4%

Corporate

ROE 12.3%

Costs/Assets 1.7%

CIR 44.3%

COR SUPPORTED BY

SEVERAL LARGE

PROVISIONS RELIESED IN

CORPORATE BUSINESS

COR 0.5%

IFRS CAR

1Q’19

NPL coverage 112.0%

N20 11.6%*

Loans

+300 bp

-30 bp

flat ytd

-40 bp yoy

+20 bp

RAS CAR

NPL ratio 5.8%+10 bp ytd

Customer

funding

▼7%

▲4%

▼4%

YTD

YTDYOY

CORPORATE GROWTH

UNDER PRESSURE,

strong pipeline promotes

delivery of business plan

5.3%

8.3%

* Preliminary estimation

21Q’2019 Results | 30-May-19

104.2

21.611.2

137.0

-15.2 -60.7

46.5

Net interestincome

Net fee andcommission

income

Otheroperatingincome

Operatingincome before

provisioncharge

Provisioncharge

Staff costs andadministrative

expenses

Net profit

15.7%12.3%

Net profit RUB bn and ROE %

ON TRACK TO DELIVER 2019 GUIDANCE

≈200

FY 2019

guidance

-16%

KEY COMPONENTS OF NET PROFIT

55.546.5

1Q'18 1Q'19

31Q’2019 Results | 30-May-19

5,996 5,582

31-Dec-18 31-Mar-19

Deposits RUB bnLoans RUB bn

▲ 4%

18.4% Market Share

▲70 bp ytd

MARKET

GROWTH (▲ 4%)

14.8% Market Share

▲ 80 bp ytd

MARKET

GROWTH (▼1%)>

2,989 3,166

31-Dec-18 31-Mar-19

4,408 4,567

31-Dec-18 31-Mar-19

>

CONTINUING TO BUILD STRONGER RETAIL, CORPORATE GROWTH

UNDER PRESSURE STRONG PIPELINE PROMOTES DELIVERY OF

BUSINESS PLAN

▲ 6%

RETAIL

CORPORATE

Deposits RUB bnLoans RUB bn

18.5% Market Share

▼20 bp ytd

▼4%

8,439 8,126

31-Dec-18 31-Mar-19

MARKET

GROWTH (▼ 1%)

19.4% Market Share

▼ 7%MARKET

GROWTH (▲ 0.3%)

▼ 130 bp ytd

w/o FX ▼1%

►In-line with strategic priorities

w/o FX ▼ 4%

41Q’2019 Results | 30-May-19

VTB Bank

60% 75% 72%

40%

25% 28%

96.1

77.2 81.2

31-Mar-18 31-Dec-18 31-Mar-19

Staff and administrative costs RUB bn

COMBINATION OF COST CONTROL AND REALISED

SYNERGIES RESULTED IN LOWER COST BASE

39.7 40.5

23.4 20.2

63.160.7

1Q'18 1Q'19

Cost / Income ratio Cost / Avg. assets

Staff costs

including

pensions

Administrative

expenses

Number of employees thsd

Other companies

of VTB Group

Post Bank: 17.7

VTB Insurance: 5.7Vozrozhdenie Bank:

VTB Bank

Including:

VTB Bank

Including:

SarovBusinessBank: 1.0

ZapSibComBank: 3.1

57.3 58.3

VTB Bank58.2

Including:

Vozrozhdenie Bank

4.6

-19 thsd

empoyees

-20%

+4 thsd

empoyees

+5%

4.6

- 4%

41.3% 44.3%

2.0%1.7%

51Q’2019 Results | 30-May-19

8.7% 8.7%

8.4% 8.4% 8.3%

1Q'18 2Q'18 3Q'18 4Q'18 1Q'19

MARGINS WERE UNDER PRESSURE DUE TO MARKET

HEADWINDS

Net interest margin %

FY 2018

3.9%

Average yield on total interest bearing assets % Cost of interest bearing liabilities %

4.1% 4.2% 3.9%3.4%

3.2%

1Q'18 2Q'18 3Q'18 4Q'18 1Q'19

FY 2018

8.6%FY 2018

4.9%

4.9% 4.8% 4.8% 5.1% 5.3%

1Q'18 2Q'18 3Q'18 4Q'18 1Q'19

-40 bp

+40 bp

-90 bp Average CBR rate %

7.4% 7.4% 7.75%

1Н'18 2H'18 5M'185M’19

61Q’2019 Results | 30-May-19

0.9%

0.5%

112.0% 112.0%

31-Dec-18 31-Mar-19

654 658

31-Dec-18 31-Mar-19

732 737

31-Dec-18 31-Mar-19

5.7% 5.8%6.4% 6.5%

COR SUPPORTED BY SEVERAL LARGE PROVISIONS

RELIESED IN CORPORATE BUSINESS

(1) The Group defines non-performing loans (NPL) as lifetime expected credit losses (ECL) credit-impaired loans with contractual principal and or interest payments overdue more than 90 days and purchased or originated credit impaired (POCI)

loans with principal and or interest payments becoming overdue more than 90 days after the date of initial recognition.

(2) Provision charge for credit losses divided by average gross loans and advances to customers.

NPLs (90+) RUB bnProvision for loan impairment RUB bn

NPL ratio (1)Allowance for loan impairment /

Total gross loans

BS

COVERAGE RATIO

8.80.5

12.0

13.7

20.8

14.2

1Q'18 1Q'19

Provision charge for impairment of loans RUB bn

Provision charge

for credit losses on loans to individuals

Provision charge

For credit losses on loans to legal entities

Cost of risk (2)

P&L WRITE-OFFS

flatytd

flatytd

-51%

flat

RUB bn

17.3

8.5

1Q'18 1Q'19

71Q’2019 Results | 30-May-19

▲20 bp ytd

CAPITAL LEVELS SUFFICIENT TO FUND FURTHER GROWTH

Total CAR

Tier I ratio

N20 (GROUP)

12.7% 12.1% 11.9% 12.0%12.3%

14.4%13.8%

13.4% 13.5% 13.7%

31-Mar-18 30-Jun-18 30-Sep-18 31-Dec-18 31-Mar-19

BASEL

RAS

IFRS

N20.0

▲20 bp ytd

▲30 bp ytd

11.0%10.8%

11.0%11.4%

11.6%*

01-Apr-18 01-Jul-18 01-Oct-18 01-Jan-19 01-Apr-19

* Preliminary estimation

81Q’2019 Results | 30-May-19

Loan growth

2019 GUIDANCE

CoR Net profit

≈ 200

Legal entities

In line vs. market

Loan growth

Above the marketIndividuals

≈1.2 % ▼formerly <1.5 %

CIR

≈ 40 %

NIM

RUB bn

≈ 3.5 % ▼formerly “FY’2018 level”Market growth ≈ 15-17%

Market growth ≈ 5%

1Q’19 FINANCIAL APPENDIX

101Q’2019 Results | 30-May-19

92%

8%

1,034.0

12M'18

Yield on total interest bearing

assets

Interest income and average yields RUB bn

Customer loans (gross)

Other interest bearing assets

Interest income on loans and

advances to customers

Interest income on other interest

bearing assets

Yield on customer loans

Average interest bearing assets RUB bn

+8%

INTEREST INCOME AND AVERAGE YIELDS

+14%

9.1%

8.6%

87%

13%

12,082

12M'18

92% 92% 93% 93% 92%

8% 8% 7% 7% 8%

248.2 255.2 261.2 269.4 268.7

1Q'18 2Q'18 3Q'18 4Q'18 1Q'19

86% 86% 87% 88% 87%

14% 14%13%

12% 13%11,534 11,764

12,280 12,750 13,112

1Q'18 2Q'18 3Q'18 4Q'18 1Q'19

9.4% 9.3% 9.0% 8.8% 8.8%

8.7% 8.7% 8.4% 8.4% 8.3%

111Q’2019 Results | 30-May-19

81% 83% 79% 74% 77%

19% 17% 21% 26% 23%131.9 133.4 140.7

159.4 164.5

1Q'18 2Q'18 3Q'18 4Q'18 1Q'19

85%

15%

11,492

12M'18

Interest expense and cost of interest bearing liabilities RUB bn

Average interest bearing liabilities RUB bn

Customer deposits

Other interest bearing liabilities

Interest expense on customer deposits

Interest expense on other interest bearing

liabilities

Cost of total interest bearing liabilities

Cost of customer deposits

INTEREST EXPENSE AND COST OF FUNDS

+25%

+17%

4.9%

4.6%

79%

21%

565.4

12M'18

4.9% 4.8% 4.8% 5.1% 5.3%

4.7% 4.6% 4.5% 4.6% 5.0%

85% 86% 85% 83% 82%

15% 14% 15% 17% 18%10,821 11,117

11,710 12,322 12,686

1Q'18 2Q'18 3Q'18 4Q'18 1Q'19

121Q’2019 Results | 30-May-19

468.6

12M'18

Net interest margin (1)

(1) Calculated as net interest income (adjusted for payments to deposit insurance system) divided by average interest earning assets, which include gross loans and advances to customers, due from other

banks (gross), debt securities and correspondent accounts with other banks.

Net interest income RUB bn

NET INTEREST INCOME AND NIM

-10%

-90bp

3.9%

12M'18

116.3 121.8 120.5 110.0 104.2

1Q'18 2Q'18 3Q'18 4Q'18 1Q'19

4.1% 4.2% 3.9%3.4% 3.2%

1Q'18 2Q'18 3Q'18 4Q'18 1Q'19

131Q’2019 Results | 30-May-19

21.924.2 23.3 20.6 21.6

1Q'18 2Q'18 3Q'18 4Q'18 1Q'19

65%68% 68%

54%64%

8%

8% 9%

9%

8%7%

6% 6%

9%

6%14%

15% 12%

21%18%

6%

3% 5%

7%4%

31.0

35.0 35.6

31.833.6

1Q'18 2Q'18 3Q'18 4Q'18 1Q'19

Fee and commission income breakdown RUB bn

Net fee and commission

income

Net fee and commission

income / avg assets (net)

Net fee and commission income RUB bn

Insurance products distribution

and other agency services

Settlement, trade finance and

cash transactions

Other

Guarantees and other credit

related commitments

Operations with securities and

on capital markets

FEE AND COMMISSION INCOME

+8%

-1%

64%

9%7%

14%

4%

133.4

12M'18

0.7%

90.0

12M'18

0.7% 0.7% 0.7% 0.6% 0.6%

141Q’2019 Results | 30-May-19

Provision charge for impairment of loans RUB bn

Provision charge

for credit losses on loans

to individuals

Provision charge

For credit losses on loans

to legal entities

Cost of risk breakdown

Cost of risk (1)

Loans to individuals

Loans to legal entities

(1) Provision charge for credit losses divided by average gross loans and advances to customers.

PROVISION CHARGE AND COST OF RISK

1.9%

1.4%

12M'18

1.6%

8.8

39.4 24.3

35.1

0.5

12.0

14.5

14.6 11.4

13.7

20.8

53.9

38.9 46.5

14.2

1Q'18 2Q'18 3Q'18 4Q'18 1Q'19

0.9%

2.2%

1.5% 1.7%

0.5%

1.9%2.2%

2.0%

1.6%

1.8%

0.5%2.2%

1.3%

1.7%

0.0%

1Q'18 2Q'18 3Q'18 4Q'18 1Q'19

107.6

52.5

160.1

12M'18

151Q’2019 Results | 30-May-19

674 743 752 654 658

705 773


714 760 779 732 737

755 800


107.1%103.5% 103.7%

112.0% 112.0%


LOAN BOOK QUALITY

Coverage ratio Loan write-offs RUB bn

NPLs (90+) RUB bn

NPL ratio (1)

NPLs

Provision for loan impairment RUB bn

Allowance for loan impairment /

Total gross loans

Allowance for loan impairment

(1) The Group defines non-performing loans (NPL) as lifetime expected credit losses (ECL) credit-impaired loans with contractual principal and or interest payments overdue more than 90 days and purchased or originated credit impaired (POCI)

loans with principal and or interest payments becoming overdue more than 90 days after the date of initial recognition.

Post Bank contribution Post Bank contribution

Post Bank accounted as JV% change adjusted for Post Bank

7.3% 7.6%

+6% +3%

6.9% 7.5%

+10% +1%

106.1%102.3%

Data as

reported

Proforma of historical data adjusted for

changes in Post Bank accounting

treatment

Data as

reported



treatment

-6% -13%1% +1%

+490 bp

+590 bp

Data as

reported



treatment

7.6% 7.8% 7.1% 6.4% 6.5% 7.1% 7.6% 6.9%5.7% 5.8%

17.3

31.236.6

71.7

8.5

1Q'18 2Q'18 3Q'18 4Q'18 1Q'19

161Q’2019 Results | 30-May-19

59% 59% 60% 58% 55%

41% 41% 40% 42% 45%

9,333 9,839 9,740 10,404 10,149


98.6% 95.6%104.6% 102.8% 104.0%

74% 73% 76% 74% 72%

26% 27%24% 26% 28%

9,953 10,206 10,969 11,427 11,292


Loans and advances to customers RUB bn Customer deposits RUB bn

Loans and advances to customers by industry

Loans / Deposits (LDR)

Loans and deposits by currency %

Net loans and advances to

customersCustomer deposits

RUBFX

31-Mar-19

RUBFX

31-Dec-18

LOAN PORTFOLIO AND CUSTOMER DEPOSITS

Individuals Legal entities

Customer deposits /

total liabilities

+13%

31-Mar-19

31-Dec-18

Individuals Legal entities

+16%

9,724 9,950

25%

75%

24%

76%

-1%

9,6109,127

40%

60%

40%

60%

Post Bank accounted as JV( X ) Post Bank accounted as JV( X )

Data as

reported

Proforma of

historical data

adjusted for

changes in Post

Bank accounting

treatment

98.7% 95.6%

-2%

+9% +11%

72%

28%

74%

26%65%

35%

64%

36%

80% 80% 77% 79% 76%

28%

9%

10%

7%

7%

7%

5%

6%

4%

4%

3%

4%

6%

26%

10%

10%

7%

7%

8%

5%

6%

4%

4%

3%

4%

6%

Individuals

Oil and Gas

Building construction

Metals

Manufacturing

Government bodies

Transport

Trade and commerce

Energy

Chemical

Finance

Telecommunications and media

Other

171Q’2019 Results | 30-May-19

76% 81% 80% 81%76%

24%19% 20% 19%

24%

5,514 5,775 5,820 5,996 5,582


7,354 7,458

8,306 8,439 8,126


Deposits of legal entities RUB bnLoans to legal entities RUB bn

Yield on loans and cost of deposits Market shares(1)

Current / settlement deposits

Term deposits+10%

BUSINESS WITH LEGAL ENTITIES

19.4% Deposits of legal

entities

18.5% Loans to legal

entities

Cost of deposits of LE

Yield on loans to LE

(1) The market share is calculated using VTB’s methodology with data from the Bank of Russia based on RAS statements (including Vozrozhdenie Bank) .

-4%

-20 bp YoY -130 bp YoY

Data as of 31-Mar-19

+1%

-7%

8.0% 7.9% 7.6% 7.7% 7.6%

4.5% 4.5% 4.4% 4.8% 5.1%

1Q'18 2Q'18 3Q'18 4Q'18 1Q'19

181Q’2019 Results | 30-May-19

76% 74% 74%75%

78%

24% 26% 26% 25% 22% 3,819 4,064 3,9204,408

4,567


43% 43% 47% 48% 48%4% 4% 4% 4% 4%5% 5% 5% 4%

4%48%48% 44% 44%

44%2,599 2,749 2,663

2,9893,166


Current / settlement depositsCash loans and other

Mortgage loans

Car loans

Deposits of individuals RUB bnLoans to individuals RUB bn

Credit cardsTerm deposits

BUSINESS WITH INDIVIDUALS

Cost of deposits of Individuals

Yield on loans to individuals

Yield on loans and cost of deposits Market shares(1)

+22% +34%

44%

5%

4%

47%

44%

5%

4%

47%

2,370 2,493

+6% 3,834

Post Bank accounted as JV ( X ) Post Bank accounted as JV ( X )

3,613

23%

77%

25%

75%

+20%+26%

(1) The market share is calculated using VTB’s methodology with data from the Bank of Russia based on RAS statements (including Vozrozhdenie Bank) .

Data as of 31-Mar-19

14.8% Deposits of

individuals

+70 bp YoY +80 bp YoY

18.4% Loans to

individuals

+4%

13.4% 13.2% 12.7% 12.0%11.9%

4.9% 4.8% 4.6% 4.4% 4.8%

1Q'18 2Q'18 3Q'18 4Q'18 1Q'19

191Q’2019 Results | 30-May-19

Other assets Securities portfolio

Loans to customers

Due from other banks

Cash and mandatory reserves

Assets structure RUB bn

+4%

BALANCE SHEET STRUCTURE AND CAPITAL

+3%

+13%

+5%

Liabilities structure RUB bn

+5% +3%

+14%

+5%

Other liabilities

Subordinated debt

Debt securities issued

Customer deposits

Due to banks and other borrowed funds

Collateralised funding from the CBR

Tier I

Total capital

Basel capital RUB bn

Total CAR

Tier I ratio

International debt maturity profile USD mln

0

827

1,339

22825

2018 2020 2022 2024 2035

USD

CHF

The total amount of public

debt matured in 2018 is c.

USD 2.8 bn

+1%flat

13% 13% 13% 12% 11%

70% 69% 72% 72% 71%

7% 6%4%

5% 7%5% 5%5%

4%5%5% 7% 6%

7%6%

13,102 13,67614,061

14,761 14,842

31-Mar-18 30-Jun-18 30-Sep-18 31-Dec-18 31-Mar-192% 2% 2% 2% 2%

2% 2% 2% 2% 2%

8% 7% 7% 4% 6%

80% 80% 77% 79% 76%

<1%<1%

3%<1% <1%

8%8% 9%

13% 14%11,640

12,244 12,605 13,238 13,295


12.7%12.1% 11.9% 12.0% 12.3%

14.4%13.8% 13.4% 13.5% 13.7%

1,327 1,297 1,322 1,383 1,405

181 183 162 161 153

1,508 1,480 1,484 1,544 1,558


201Q’2019 Results | 30-May-19

Key financial ratios

Income statement key indicators RUB bn

VTB GROUP FINANCIAL HIGHLIGHTS: P&L AND KEY RATIOS

1Q’19 1Q’18 Change 12М’18

Net interest income 104.2 116.3 -10.4% 468.6

Net fee and commission income 21.6 21.9 -1.4% 90.0

Net other income 11.2 14.4 -22.2% 82.7

Operating income before provisions 137.0 152.6 -10.2% 641.3

Provision charge for credit losses and other provisions -15.2 -20.7 -26.6% -167.1

Staff costs and administrative expenses -60.7 -63.1 -3.8% -259.8

Profit before tax 61.1 68.8 -11.2% 214.4

Income tax expense -14.6 -13.3 9.8% -35.6

Net profit 46.5 55.5 -16.2% 178.8

1Q’19 1Q’18 Change 12М’18

NIM 3.2% 4.1% -90 bp 3.9%

CoR 0.5% 0.9% -40 bp 1.6%

Cost / Assets 1.7% 2.0% -30 bp 1.9%

CIR 44.3% 41.3% 300 bp 40.5%

ROE 12.3% 15.7% -340 bp 12.3%

211Q’2019 Results | 30-May-19

31-Mar-19 31-Dec-18 Change 30-Sep-18 30-Jun-18 31-Mar-1801-Jan-18

IFRS 9

NPL ratio (1) 5.8% 5.7% 10 bp 6.9% 7.6% 7.1% 6.9%

LLR ratio 6.5% 6.4% 10 bp 7.1% 7.8% 7.6% 7.5%

Tier I CAR 12.3% 12.0% 30 bp 11.9% 12.1% 12.7% 12.5%

Total CAR 13.7% 13.5% 20 bp 13.4% 13.8% 14.4% 14.3%

(1) The Group defines non-performing loans (NPL) as lifetime expected credit losses (ECL) credit-impaired loans with contractual principal and or interest payments overdue more than 90 days and

purchased or originated credit impaired (POCI) loans with principal and or interest payments becoming overdue more than 90 days after the date of initial recognition.

Balance sheet key indicators RUB bn

VTB GROUP FINANCIAL HIGHLIGHTS: BALANCE SHEET

Key asset quality & capital ratios

Post Bank accounted as JV

Post Bank accounted as JV

31-Mar-19 31-Dec-18 Change 30-Sep-18 30-Jun-18 31-Mar-1801-Jan-18

IFRS 9

Gross loan portfolio 11,291.5 11,427.1 -1.2% 10,968.8 10,206.2 9,952.8 9,841.1

Loans to legal entities 8,125.5 8,438.6 -3.7% 8,305.7 7,457.6 7,353.5 7,307.4

Loans to individuals 3,166.0 2,988.5 5.9% 2,663.1 2,748.6 2,599.3 2,533.7

Total assets 14,841.8 14,760.6 0.6% 14,060.6 13,675.9 13,102.0 12,940.0

Customer deposits 10,149.0 10,403.7 -2.4% 9,740.1 9,839.2 9,333.3 9,144.7

Deposits of legal entities 5,582.2 5,995.8 -6.9% 5,819.8 5,775.3 5,513.9 5,523.1

Deposits of individuals 4,566.8 4,407.9 3.6% 3,920.3 4,063.9 3,819.4 3,621.6

Total liabilities 13,295.2 13,237.6 0.4% 12,604.6 12,243.7 11,640.4 11,529.2

Total shareholders' equity 1,546.6 1,523.0 1.5% 1,456.0 1,432.2 1,461.6 1,410.8

221Q’2019 Results | 30-May-19

This presentation has been prepared by VTB Bank (PJSC) (“VTB”) and has not been independently verified. This presentation does not

constitute or form part or all of, and should not be construed as, any offer of, or any invitation to sell or issue, or any solicitation of any offer to

purchase, subscribe for, underwrite or otherwise acquire, or a recommendation regarding, any shares or other securities representing shares in,

or any other securities of VTB, or any of its subsidiaries, nor shall it or any part of it nor the fact of its presentation or distribution form the basis

of, or be relied on in connection with, any contract or any commitment whatsoever or any investment decision. Some of the information in this

presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of VTB and

its subsidiaries (together with VTB, the "Group"). Forward-looking statements are statements that are not historical facts. They include

statements about our beliefs and expectations and the assumptions underlying them. These statements are based on plans, estimates and

projections as they are currently available to the management of VTB. Such forward-looking statements are based on numerous assumptions,

beliefs and expectations regarding the Group's present and future business strategies, financial conditions, targets and the operating

environment. We caution you that these statements are not guarantees of future performance and involve risks, uncertainties and other

important factors that we cannot predict with certainty. Accordingly, our actual outcomes and results may materially differ from what we have

expressed or forecasted in the forward-looking statements. These forward-looking statements speak only as at the date of this presentation and

are subject to change without notice. We assume no obligation to update or revise these statements whether as a result of new information or

for any other reason or to make them conform to actual results. Certain numbers and ratios contained herein, related to past dates and periods,

might have been restated in accordance with the latest financial statements issued, and hence differ from the ones presented in the previous

communications. Figures shown in this presentation are based on figures disclosed in the annual and interim financial statements of the Group.

However, figures used in this presentation might have been rounded, which could result in slight differences in percentage changes compared to

those provided in such financial statements.

DISCLAIMER

Investor Relations

Tel: +7 (495) 775-71-39

e-mail: [email protected]

1q2019 ifrs results eng 30052019 1722 - vtb...107.6 52.5 160.1 12m'18. 1q’2019 results |...

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