MOSCOW (Reuters) - Russia's second-largest bank VTB more than doubled its net profit in the first quarter compared with a year ago as it cut provisions against non-performing loans, the state-run lender said on Monday.
VTB's financial performance took a hit in 2020 from the need to increase provisions against bad loans but this year could bring some respite after the central bank said it did not see any debt-related problems in the Russian banking system.
VTB said it made 85.1 billion roubles ($1.12 billion) in first quarter net profit compared with 39.8 billion roubles in the same period a year ago.
The increase took place as VTB set aside 22.6 billion roubles in loan loss provisions in January-March, down from 45.1 billion roubles in the same period of 2020.
VTB's shares underperformed the market after the results were published, falling 1.2% on the day, compared with a 0.2% decline in the benchmark MOEX index.
First-quarter results reflect VTB's "robust operating performance as well as the post-pandemic economic recovery," said Dmitry Pianov, the bank's chief financial officer.
"These results fully confirm our guidance for the full year and put VTB firmly on track to deliver a solid return on equity going forward."
VTB aims for a record income in 2021 of 250-270 billion roubles in 2021 after reporting a 63% decline in net profit last year as the COVID-19 pandemic triggered a hike in provisions against bad loans.
VTB's cost of risk for the first three months of 2021 amounted to 0.7%, an 80 basis points decline compared to the same period of 2020.
VTB's net interest income rose 21.6% year on year to 145.6 billion roubles in the first quarter.
($1 = 76.2400 roubles)