November 8, 2018 / 9:04 AM / 13 days ago

UPDATE 1-Russia's VTB Q3 profit more than doubles

(Adds detail, market reaction)

MOSCOW, Nov 8 (Reuters) - VTB, Russia’s second-biggest bank, said on Thursday its third-quarter net profit more than doubled from a year earlier on higher lending although the results still fell short of analysts’ expectations.

VTB said its net profit rose to 41.2 billion roubles ($623 million) in the third quarter from 17.4 billion roubles a year earlier. Analysts polled by Reuters on average expected VTB to post 45.3 billion roubles in the third-quarter net profit.

Shares in VTB rose 0.9 percent as of 0825 GMT, outperforming the benchmark stock index MOEX that was up 0.1 percent on the day as the market welcomed the overall figures.

For the first nine months of 2018 state-run VTB posted an 85.5 percent increase in net profit to 139.7 billion roubles.

The net profit increase was driven by “growth in core income lines, lower provision charges year-to-date and enhanced cost efficiency,” the bank said.

Dmitry Olyunin, VTB’s first deputy president and management board chairman, said the banking sector growth in Russia has exceeded initial expectations even though the central bank’s rate has not gone as low as previously expected.

“We are moving towards the target of 170 billion roubles in profit at year-end,” Olyunin told a conference call with reporters, presenting the bank’s financial results.

Gross loans to legal entities rose 11.4 percent by the end of the third quarter compared with three months earlier, while gross loans to individuals declined by 3.1 percent.

The bank’s total assets rose 2.8 percent to 14.07 trillion roubles by the end of the third quarter from 13.68 trillion roubles as of end of the second quarter.

VTB said its provisions for non-performing loans stood at 42.4 billion roubles in the third quarter, lower than a poll of 45.4 billion roubles and nearly unchanged from the same period last year.

The bank’s operating income before provisions rose 27.2 percent in July-September, while net interest income increased by 3.3 percent to 120.5 billion roubles. ($1 = 66.1365 roubles) (Reporting by Katya Golubkova and Andrey Ostroukh Editing by Keith Weir)

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