MOSCOW: Russia's second-largest bank VTB made net profit in the first quarter of just 0.6 billion roubles ($9.2 million), it said on Monday, worse than analysts had forecast.
The financial result shows Russia's banks still face tough operating conditions despite signs that an economic slump is beginning to ease.
VTB, like several other large Russian lenders, is under Western sanctions over Moscow's role in the Ukraine conflict that limit its access to international capital markets.
Analysts had predicted it would earn 4.6 billion roubles of profit in the first three months of the year, versus a loss of 18.3 billion roubles in the same period of 2015.
Andrey Kostin, VTB chief executive, said in a statement the results reflected a "continued stabilisation of business activity".
The bank's net interest income more than doubled from a year earlier to 98 billion roubles as borrowing costs fell, while fee and commission income rose 13 percent to 17 billion roubles.
Loan-loss provisions fell 17 percent from a year earlier to 41 billion roubles, VTB said.
VTB has previously been cautious on the outlook for 2016, saying in March that it saw "meaningful risks" in economy.
It made meagre profit of 1.7 billion roubles last year as the economy slumped 3.7 percent and bad loans rose.
The Russian economy is expected to contract by a further 1.5 percent in 2016, according to a Reuters poll last month, suggesting risks for banks will stay elevated.
VTB has played a major role in funnelling capital to the resource exporters that dominate Russia's economy.
It is included in a list of Russian state firms in which the government plans to sell stakes this year. The government could sell a 10.9 percent stake.
VTB's shares were up 0.9 percent by 0708 GMT, outperforming Moscow's MICEX index which rose 0.7 percent in early trade.
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