RBC DAILY. Volgoprombank, one of the largest banks in the Volgograd region, reported nearly a 70% downslide in its net profit. As RBC Daily wrote, the bank attributes this trend to a spike in corporate expenses related to the formation of reserves that minimizes the lender’s risks amid the financial crisis.
Based on the quarterly financial statement, Volgoprombank reported a 69.5% decline in its Q308 net profit to Rub 98,000. Lower net profit pushed down ROA by 86.5% and ROE by 75.7%. The bank attributes a drop in net profit to higher expenses. According to the lending institution’s chief accountant Larisa Evdokimova, the company needed funds to form reserves under lending operations. Given the financial crisis this will make it possible to minimize risks when loans are not repaid. Evdokimova told RBC Weekly Yug that next year the lending institution will mainly focus on boosting profitability. The plan is also to roll out SME lending and execute salary projects.
The lender targets turning into one of the leaders on the Volgograd region’s bank card market (more than 10,000 cards issued by the bank were used at the end of Q308). Furthermore, Volgoprombank plans to expand the network of its divisions. According to Evdokimova, expansion will become possible at the expense of new inter-bank loans that became available to the bank after the ownership shakeup.
