VTB announced uncertainty with dividends due to market risks – RBC

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Member of the Board of VTB Pyanov: uncertainty about the payment of dividends has increased

The payment of a record remuneration for 2021 may be in doubt due to instability in the markets and the risk of sanctions, VTB said. Bank management also declined to announce business targets due to volatility

The decision on the amount of VTB dividends for 2021 has been postponed until April – top management is not yet ready to voice its recommendations due to increased market uncertainty, Dmitry Pyanov, board member of the state bank, said at a briefing. The group released last year’s IFRS results today, but declined to disclose key business targets for 2022 – net income target, return on equity (ROE), cost of risk (CoR), as well as plans to grow the loan portfolio. According to Pyanov, management decided to wait for a “more predictable situation” to announce targets, as well as recommendations on the amount of payments to shareholders.

VTB net profit in January fell 11 times due to a collapse in the markets

“Uncertainty about our dividend payment, unfortunately, persists and has increased, so management, the supervisory board and the annual general meeting of shareholders are not in a position to make decisions on dividends or propose even such a dividend amount that would lead to violation of post-dividend markups. We are postponing communication with what proposal the management will come up with until about April of this year, ”Pyanov said.

As follows from VTB’s IFRS reporting, last year the state bank’s net profit amounted to a record 327 billion rubles. The group previously announced plans to pay shareholder remuneration at the level of 50% of IFRS net profit, the cut-off bar for state-owned companies, which the Ministry of Finance traditionally insists on. Thus, the planned amount of VTB dividends for 2021 was to be 163.5 billion rubles.

Pyanov mentioned that volatility in financial markets leads to a negative revaluation of securities on VTB’s balance sheet, which puts pressure on the credit institution’s capital adequacy ratios. According to VTB, fixing losses at the level of 18 billion rubles. reduces the group’s equity capital adequacy ratio (N 20.0) by 0.1 percentage points. At the end of 2021, VTB’s standard on a consolidated basis was 12%, which is only 0.5 p.p. exceeds the threshold level, taking into account allowances.

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