Despite early claims that the crisis in Ukraine would not affect them, Russia's largest banks are beginning to feel the pinch of sanctions and a slowing domestic economy. Last week, vtb group announced that its first-quarter profits had plummeted by 97.5% to Rbs400m (US$11m), hammered by loan loss provisions and foreign exchange revaluations. Its main rival, sberbank, was more profitable, but its profits in the same period fell by 18% year-on-year. Sberbank faced a loan impairment charge of Rbs77bn. "I think it is fair to say that the first quarter was exceptional in terms of provision charges," said Herbert Moos, deputy president and chairman of the VTB Bank management board, in a call with analysts. "I think we clearly do not expect the repeat of the Ukrainian crisis. We clearly do not expect such a material devaluation of the rouble. But at the same time, one cannot discount such or similar events."
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