MOSCOW, Jan 29 (Reuters) - VTB24, the retail arm of VTB - Russia's second-biggest bank, said it expected retail lending growth to slow to 25-27 percent this year, as lenders prepare measures to protect themselves from bad loans.
Higher provisions, a fall in banks' capital adequacy ratios and slacker demand for new loans were all likely to contribute to slower growth, VTB24 chief executive Mikhail Zadornov told reporters on Tuesday.
Retail lending growth - 39 percent last year after 36 percent in 2011 - has been worrying the central bank, which has told banks to set aside more provisions for unsecured retail loans as of March to provide more protection against bad loans.
Russians have borrowed heavily to buy goods such as cars and TVs as the economy recovered from the 2008-09 financial crisis.
VTB24 expects to outpace the market as lending growth slows, said Zadornov, a former finance minister. Last year, VTB24 increased retail lending 40 percent, up from 36 percent in 2011, mostly boosted by cash loans, mortgage lending and lending to small businesses, according to a presentation on Tuesday.
The unit's net profit under local accounting standards rose 28 percent to 37 billion roubles ($1.2 billion), Zadornov said.
According to central bank data, the local capital adequacy ratio in Russia's domestic banking system stood at 13.6 percent as of Dec. 1, down from 14.7 percent at the start of the year.
In recent research, ratings agency Moody's said it expected Russian banks to expand further into consumer lending but at a slower pace, pointing to a possible rise in problem loans.
"While most banks active in retail lending describe the retail loan market as underpenetrated, data on personal debt service ratio gives an opposite picture," it said. ($1 = 30.18 roubles) (Reporting by Katya Golubkova; Editing by Dan Lalor)