By Elena Fabrichnaya
MOSCOW (Reuters) - Russia's No. 2 lender VTB has raised its retail lending forecast for Russia this year to 17% from 11%, now expecting stable economic conditions to produce a 33.5-trillion-rouble ($410.3 billion) market, a senior bank official said.
Lending across Russia's banking sector did not grow as expected in 2022, hampered by sweeping Western sanctions in response to Moscow despatching troops to Ukraine last February.
VTB is eyeing a profit rebound after slumping to a $7.7 billion loss last year, while economic forecasts for Russia are getting rosier, even if the long-term outlook remains subdued.
First-quarter retail loans in Russia were 19% higher year-on-year, Deputy President-Chairman of VTB's management board Anatoly Pechatnikov said at a briefing, and 8% higher than in 2021, a year of record lending and profits for the banking sector.
"We have revised our forecast and believe that a stable economic situation will ensure more active retail lending growth in Russia," Pechatnikov said.
In April alone, VTB's retail loans will exceed 200 billion roubles, a significant jump on 2022, when individuals' credit activity was "frozen" as Russia adjusted to sweeping sanctions on its financial sector, he said.
"Over the year, the lending market in Russia has strengthened significantly, and if 2022 was a time for adapting to new conditions, then already this year we are hoping for a recovery," Pechatnikov said.
Part of that process is a Russia-wide 'dedollarisation' drive, as Moscow seeks to foster trade in the currencies of nations it considers 'friendly', principally China's yuan.
"The share of roubles and yuan in the bank's retail liabilities will reach 93% by the end of the year," Pechatnikov said. "Given this trend and the rate of customers' transfer to alternative savings instruments, we assume that depositors will be able to almost completely abandon savings in dollars and euros in the next 2-2-1/2 years."
VTB stopped accepting savings fund deposits in U.S. dollars and euros in April.
($1 = 81.6455 roubles)