Russia’s second-largest bank VTB slashed its 2020 net profit guidance, the state-run lender said on Monday, as it reported a 66% drop in third-quarter profit to 17.2 billion roubles ($222.9 million) due to higher provisions against bad loans. The COVID-19 pandemic put pressure on Russia’s banks, prompting them to create extra provisions against bad loans amid economic contraction and a weaker rouble. VTB now sees its 2020 net profit at 70-75 billion roubles, VTB Senior Vice President Dmitry Pyanov, compared with 220-230 billion roubles the bank had predicted before the new coronavirus hit Russia’s economy. In the third quarter, VTB’s provision charge for possible credit losses rose to 72 billion roubles from 32.4 billion roubles in the same period of 2019. “Following the inevitable deterioration of the financial condition of some types of borrowers due to the restrictive measures, we have significantly increased loan loss provisions, which put strong pressure on the bottom line,” Andrei Kostin, VTB’s president and chairman of the board, said. The ratio of non-performing loans rose to 5.7% as of Sept. 30, up from 5.1% as of June 30 and 4.7% seen in late 2019. VTB’s net interest income rose in the July-September period to 135.5 billion roubles, up 23% year-on-year. VTB’s shares were up 1% on the day after the earnings report, slightly outperforming the benchmark MOEX index that was up 0.8% as of 0733 GMT. VTB is in talks with the finance ministry to buy back its preferred shares held by the state worth 500 billion roubles, the process that can take several years, Pyanov told reporters.