Grounds for the distribution of VTB Bank's profit for 2017
The total amount of dividend payments amounted to RUB 73.5 billion, or 61.2% of the Group’s consolidated IFRS net profit for 2017 (72.6% of the Bank’s net profit under RAS), while dividends on ordinary shares amounted to 37% of the Bank’s consolidated net profit under IFRS (or 44% of the Bank’s net profit under RAS).
The amount of dividend payments for 2017 complies with the Bank’s Regulation on the Dividend Policy, approved by the Bank's Supervisory Council (Minutes No. 2 of 29 January 2016), which provides for the payout in dividends of at least 25% of the Bank’s consolidated net profit under IFRS.
Dividend payments for each type of Bank share for 2017 were calculated based on the principle of the equalisation of returns for all three types of Bank shares; the dividend yield for each type of share was 5.51% (for each ordinary share, this was calculated based on their average market value on Moscow Exchange for 2017; for preference shares, it was based on the par value of each type of share).
A portion of the net profit was allocated to the Reserve Fund, since in accordance with the Federal Law on Joint-Stock Companies and the Charter, the Bank must make annual payments to the Reserve Fund in the amount of at least 5% of net profit until the Reserve Fund reaches 5% of the charter capital. As a result of the increase in the Bank's charter capital in 2015, it became necessary to make contributions to the Bank's Reserve Fund in the amount of 5% of the Bank’s net profit for the relevant reporting year. Contributions to the Bank's Reserve Fund for 2017 amounted to RUB 5.1 billion (compared to RUB 3.5 billion for 2016).
The Bank's retained net profit, which amounted to RUB 22.7 billion as of the end of 2017, is used to ensure the growth of the Bank’s business and to cover finance capital expenditures and other goals as part of the implementation of VTB Group’s strategy for 2017–2019.