VTB is on the verge of a catastrophe with ruble liquidity

In the banks of the VTB group, the structural deficit of rubles is growing, which is covered by injections from the state.
Origin source
About this on Friday in the review reports Raiffeisenbank with reference to VTB reporting under IFRS. In the third quarter, the second state bank of the Russian Federation received from the Ministry of Finance and the Central Bank 296 billion rubles. It is about repo loans, which are issued by the central bank on security of securities, as well as on treasury operations, which places free funds of the federal budget in banks.

Access to these money is only a narrow group of state-owned banks, of which VTB is the largest recipient. It accounts for more than half of all budget injections into the banking system.

The deficit of ruble liquidity increased, despite the inflow of money from legal entities - corporate deposits for the quarter increased by 150 billion rubles.

In total, the banks of the group (VTB, VTB 24, BM-Bank and Post Bank) had a net debt to the Finance Ministry and the Central Bank for 907 billion rubles - more than all the other banks combined. The amount allocated by VTB is 1.7 times higher than the annual federal budget spending on education and twice the amount that goes to health care.

As a result of the quarter, VTB recorded a significant impairment of assets, said Raiffeisenbank. In particular, it was necessary to write off investments of 7 billion rubles in the shares of FC Otkrytie, which since August has been on treatment in the Central Bank's rehabilitation fund. The rate at which land, buildings and intangible assets on the balance sheet has depreciated threefold - in the quarter, such losses amounted to 10.5 billion rubles (against 3.6 billion a quarter earlier). Investment property depreciated by 9.3 billion rubles.

At the same time, there were no improvements in the situation with loans: as of October 1, 6.4% of the portfolio, or 614 billion rubles, accounted for loans with overdue more than 90 days. For the quarter, their volume increased by 13.1 billion rubles.

Stock of capital from VTB will be enough to create reserves for 151 billion rubles, according to a review by Raiffeisenbank. "Such a stock looks modest given that the amount of impaired loans at the end of 2016 was 1.08 trillion rubles, which is covered by 65% ​​reserves," analysts say.

To cure the chronic shortage of ruble liquidity, VTB Bank intends to change the business model and attract deposits worth a trillion rubles, the head of the bank, Andrey Kostin, told in December.

According to him, the bank's previous mode of operation, based on obtaining cheap loans in the West, has exhausted itself.

"We attracted money from abroad in dollars." And this model does not work today, especially after the devaluation and introduction of sanctions, customers today do not borrow in dollars from us, and it is almost impossible to fund in dollars today in the West ", - said Costin.