MOSCOW, April 27 Reuters Russia39;s No. 2 lender VTB on Thursday posted first quarter net profit of 146.7 billion roubles 1.8 billion and kept its forecast for record profits this year as the bank recovers from a 7.7 billion sanctionsinduced loss in 2022.

VTB, heavily exposed to international markets and with more than 20 of its loan portfolio in foreign currencies, was particularly hard hit in the early stages of the conflict in Ukraine, as Western sanctions targeted Russia39;s financial sector.

Russian banks were ordered to limit disclosures by the central bank last year. VTB did not provide a comparative figure for its firstquarter results, but said its net interest margin increased to 3.1 and its return on equity was 35.3.

The bank39;s total loan portfolio rose 3.3 yearonyear in the first quarter to 17.9 billion roubles, the bank said, while the share of nonperforming loans climbed 30 basis points in the period to 4.4.

Russian banks have rallied after an initial hit from last year39;s sanctions against Moscow, with lenders now jostling for business from the state, particularly a burgeoning defence budget, and the country39;s big corporate accounts.

An additional issue of ordinary shares strengthened VTB39;s capital base in the first quarter, CFO Dmitry Pyanov said in a statement, with results driven by steady banking revenues as the cost of risk normalises.

Pyanov said the final price of VTB39;s second additional share issue will be determined in May.

Pyanov…