May 23, 2013 / 8:45 AM / in 5 years

Russia's Vozrozhdenie Q1 net profit down 36.7 pct y/y

MOSCOW, May 23 (Reuters) - Vozrozhdenie, a mid-sized listed Russian bank, posted on Thursday a 36.7-percent decline in net profit for the first quarter of the year due to a rise in provisioning on bad loans.

Vozrozhdenie, one of a handful of listed Russian banks that are not owned by the state, said its net profit came to 333 million roubles ($10.6 million) for the first three months, compared to 526 million roubles a year earlier.

The bank was able to increase lending to its core clients - small and medium-sized enterprises - with the bank’s loan book growing by 5 percent, year-on-year.

But non-performing loans increased to 10.3 percent at the end of the first-quarter, from 9 percent at end-2012, the bank said in a statement.

“If the prevailing macro-economic conditions continue in the second half of the year, we can expect the credit quality of individual borrowers to worsen,” the bank’s Deputy Chairman Tatiana Gavrilkina was cited as saying in the statement.

“Therefore, applying a conservative approach to the assessment of the credit risk, we have decided to increase allocations to provisions on bad loans.”

The bank’s overall assets grew by 15 percent, year-on-year, but were nearly flat from the beginning of the year, the bank said in a statement.

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