VTB Bank (Europe) SE i.L. presents latest figures on business performance 2022
- Business volume shrinks significantly
- Liquidity situation remains stable, capital ratios increase
VTB Bank (Europe) SE i.L. (VTBE) reports on its current business performance with the publication of its annual financial statements for 2022 and additional unaudited figures as of the end of the first half of 2023. The subsidiary of Russia’s second-largest bank, which is based in Frankfurt am Main and holds a German banking license, has been subject to a ban on new business imposed by the German banking supervisory authority since spring 2022. At the end of March 2023, the Annual General Meeting of VTBE resolved that the bank will enter into liquidation under company law with effect from April 1, 2023.
As a result of this overall situation, VTBE’s total assets declined to EUR 3.1 billion at the end of the first half of 2023. At the end of 2022, this was still EUR 4.5 billion. Compared to the end of 2021 (EUR 7.3 billion), i.e. before the start of the Ukraine war, the decline thus already amounts to around 57 percent in less than one and a half years.
Customer relationships and accounts at VTB Direktbank, which is run as a branch of VTBE, have declined even faster. The amount of deposits at the direct bank, which still stood at EUR 2.6 billion at the end of 2021, fell to around EUR 1 billion within one year by the end of 2022.
They are currently already below EUR 300 million. In total, the direct bank has closed more than 160,000 accounts. The remaining deposits at the direct bank are to be repaid in the coming weeks.
The volume of deposits protected by the German deposit insurance systems was still around EUR 3.8 billion at the end of 2021 and has now fallen to EUR 600 million. In addition to remaining deposits of private savers at the direct bank, this figure also includes secured deposits of institutional depositors such as municipalities, health insurance funds and pension funds, as well as deposits in foreign currencies and from sanctioned institutions.
The liquidity situation at VTBE has been stable throughout the period and continues to be so. This is primarily due to capital buffers held in reserve as well as to numerous successes in efforts to recover granted loans ahead of maturity. The loan portfolio (around EUR 4.1 billion at the end of 2021) shrank to EUR 2.7 billion at the end of 2022 and to EUR 1.9 billion at the end of the half-year.
This is reflected in the capital ratios. For example, the core capital ratio (minimum requirement 9.375 percent), which was 15.9 percent at the end of 2021 and already 32.7 percent at the end of 2022, is 42.1 percent as of June 30, 2023, due to the solid capitalization combined with a shrinking business volume.
VTBE will continue the process of winding down its business relationships in an orderly and value-preserving manner during the liquidation phase. Interested parties can find the annual report for the 2022 financial year with further information on the website in the download section.