Russia's state-owned VTB bank said Thursday it was ready to resist Western sanctions imposed on it over Ukraine after its second-quarter profits took a knock.
The number two Russian bank said its net profit plunged by over four-fifths from the figure for the same period last year to 1.9 billion rubles ($52 million, 39 million euros).
Its net banking income -- revenue generated from lending -- rose by 14 percent however to 87 billion rubles, while income from commissions edged up 2.8 percent to 14.5 billion rubles.
But loan loss provisions nearly doubled to 45.2 billion rubles. VTB also took a hit of 3.2 billion rubles due to unfavourable exchange rate developments.
“A challenging operating environment and correspondingly high cost of risk put pressure on VTB Group’s profitability in the second quarter and first half of 2014," VTB chief executive Andrei Kostin said in a statement.
"At the same time, our six-month results reconfirm that we are positioned well to withstand both geopolitical and macroeconomic headwinds," he added.
VTB was hit by US and EU sanctions in July that severely limited its access to international markets, but the uncertainty over the Ukraine crisis and sanctions had hit sentiment towards Russian companies for several months.