Russia’s second largest bank, VTB, has posted a Net Loss of 20.5 billion Roubles under IFRS.

The bottom line compares with a 1Q 2008 Net Profit of $121 million – This is the first quarter VTB is postings its IFRS results in Roubles rather than dollars.

The bank attributed the Net result largely to a 49.2 billion Rouble provision charge, up more than ten fold from 1Q 2008, to 7.1% of its total loan portfolio, and up from 4.8% at the end of 4Q 2008. VTB took a further hit came from a 42.6 billion Rouble loss in its foreign exchange operations. The total loan portfolio was up 7.5% year on year to 2.8 trillion Roubles, with total deposits up 11% to 1.2 trillion Roubles.

VTB President, Andrei Kostin, noted the impact of the tough environment reflecting the wider downturn in the Russian economy.

“In the face of extremely tough economic conditions, VTB is working hard alongside the Government to support its customers. We continue to maintain tight control on costs and risks. The level of provisions is to remain high in 2009 and we would not expect to return to profit this year. We are confident that we will be able to weather the storm and emerge successfully with a strong franchise when the economy recovers.”