Updated March 1st, 2024 at 16:27 IST

VTB aims for $7 billion annual profit by 2026: CEO

VTB bounced back in 2023, reporting a record profit of 432.2 billion rubles after facing challenges in the previous year.

Reported by: Business Desk
Russia's second-largest bank VTB | Image:Shutterstock

VTB's profit projections: VTB, Russia's second-largest bank, anticipates a robust growth trajectory with an annual net profit expected to exceed 650 billion rubles ($7.12 billion) by 2026, according to CEO Andrei Kostin. This projection comes alongside the unveiling of a new three-year strategy for the institution.

Following a challenging period, VTB rebounded, reporting a record profit of 432.2 billion rubles in 2023, a notable recovery from the sanctions-induced loss experienced in the previous year.

As part of its initiatives, VTB has been instrumental in Russia's shift towards alternative payment systems, seeking to reduce reliance on the dollar and exploring opportunities in markets such as China. Despite some challenges in currency conversions, particularly with certain friendly currencies, VTB remains optimistic about its financial messaging system's effectiveness.

While demand for deposits in China's yuan may be subdued, VTB is focused on expanding its presence in remote regions of Russia, aiming to gain market share currently dominated by Sberbank. Projected profits stand at 520 billion rubles in 2025, with further growth anticipated to reach approximately 650 billion rubles by 2026.

Kostin stressed the importance of positioning VTB as a bank catering not only to businesses but also to individuals, as part of its strategy to compete with Sberbank effectively.

The bank's recovery and substantial profit growth are expected to enable it to resume dividend payments from 2026 onwards, with an estimated total payout of 80 billion rubles. Kostin even hinted at the possibility of dividend payments based on the bank's 2024 results.

(With Reuters Inputs)

Published March 1st, 2024 at 16:27 IST