VTB will return to profit earlier than expected in 2010 after slumping to a $2 billion loss last year, its finance chief said Tuesday.
Finance director Herbert Moos said the bank could return to profit in the first quarter to end March, rather than the second quarter he had previously forecast, because of the improving economic climate and reduction of bad loans.
"This year did not begin badly for us. I expect there will be a profit [in the first quarter]," Moos told reporters.
He warned that margins would continue to suffer from falling interest rates — chopped by 25 basis points again last week — but said net interest margin would continue to rise.
"We have seen a significant fall in interest rates, so we expect some pressure on margins, but will be able to show a net interest margin higher than the average for 2009, when it was 4.6 percent," he said, adding that he expected interest rates to continue to fall.
VTB stock closed down 1.64 percent at 0.079 rubles, underperforming the broad MICEX index and rival Sberbank.
VTB earlier said it swung to a net loss of 59.6 billion rubles ($2 billion) for the full year 2009, in line with forecasts, from a net profit of $212 million in 2008.
State-controlled VTB was in the red for six consecutive quarters because of heavy provisions for bad loans built up during the financial crisis, but has since adopted a cautious approach to lending and borrowing to drag itself back to profit.
Russia's biggest bank and VTB rival Sberbank posted a 2009 profit earlier this month and said it was cautiously optimistic for the current year.
Moos said VTB's credit growth was likely to be 15 percent this year, while nonperforming loans would likely peak at about 10 percent to 12 percent of the lending portfolio by midyear.
Nonperforming loans were at 9.8 percent of total loans at the end of 2009, and VTB said it would maintain a conservative provisioning policy with a coverage rate of 95 percent of nonperforming loans.