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. Last Updated: 07/27/2016

VTB Optimistic After 9-Month Loss

VTB expects slower growth in provision charges to result in a recovery after missing analyst forecasts with a nine-month net loss of 45.5 billion rubles ($1.49 billion).

State-controlled VTB missed the 41 billion ruble average net loss forecast by analysts in a Reuters poll.

“The modest improvement in net interest margin gives ground to expect the fourth-quarter results to be better,” UralSib analyst Leonid Slipchenko said.

VTB said third-quarter provision charges were lower than those made in the previous two quarters of 2009, indicating that the charges had passed their peak and are on a downward trend.

The allowance for loan impairments increased to 7.9 percent of total gross loans in the first nine months of the year from 3.6 percent at the end of last year.

“Although provisions have adversely affected results in the first nine months, we are increasingly confident that our focus on loan quality and cost efficiency has positioned the bank well for economic recovery in 2010,” VTB chief executive Andrei Kostin said in a statement.

Net interest margin continued to recover, reaching 4.4 percent in the third quarter from 4.3 percent in the second quarter, VTB said.

VTB’s larger peer, Sberbank, posted net profit of 9.1 billion rubles for January-September 2009 and expects that provisions for bad loans may rise to 12 percent to 14 percent in 2010 from 10 percent to 10.5 percent at the end of 2009.