August 9, 2018 / 8:51 AM / 7 days ago

UPDATE 1-Russian bank VTB beats Q2 forecasts despite provisions jump

* Net profit up almost 42 pct

* Provisions for non-performing loans jump 60 pct

* Raises year net profit guidance to 170 bln from 150 bln roubles

* Shares down as U.S. sanctions threat hits Russian assets (Adds details, quotes, background)

By Tatiana Voronova

MOSCOW, Aug 9 (Reuters) - Russian bank VTB beat forecasts with a 41.9 percent jump in second-quarter net profit to 43 billion roubles ($650.5 million) despite higher provisions for non-performing loans.

That topped the 38.9 billion rouble profit expected by analysts in a Reuters poll as net interest income rose 6.7 percent and net fee and commissions income rose 3.4 percent.

CEO Andrey Kostin noted return-on-equity in the first half rose to 14 percent, up from 8.2 percent a year earlier.

“We can also report tangible progress across all key strategic development targets,” he said in a statement. The solid quarterly results allowed the bank to raise its full-year net profit guidance to 170 billion from 150 billion roubles.

Russia’s banking sector has been rocked in the past year by weakness that has forced the central bank to take over three private lenders.

VTB had to write off some of its investment in Otkritie holding, ex-parent of one of the lenders involved, Otkritie bank.

Its second-quarter provisions for non-performing loans rose to 48.3 billion roubles from 30.1 billion a year earlier and topped the 46.6 billion expected by analysts in a Reuters poll.

Its non-performing loans ratio rose to 7.6 percent at end-June from 6.9 percent at the start of the year.

Gross loans rose to 10.2 trillion roubles from 9.84 trillion at the start of the year.

VTB shares were down 5.3 percent at 0803 GMT as the overall Russian market faced pressure from news of planned new U.S. sanctions.

Dmitry Pyanov, senior vice-president at VTB, told a conference call on Thursday that the bank was studying the new sanctions proposals and was not yet able to comment.

$1 = 66.1022 roubles Additional reporting by Katya Golubkova and Polina Ivanova; editing by David Evans and Jason Neely

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