MOSCOW, October 21 (RIA Novosti) - VTB Group, Russia's largest banking group, announced on Wednesday a net loss of 31.5 billion rubles ($1.07 billion) in January-June 2009.

VTB Group posted a net loss of 11 billion rubles ($373 million) in the second quarter of 2009 compared with 20.5 billion rubles ($695 million) in losses in the first quarter of 2009 and a net profit of 13.1 billion rubles ($44 million) in the second quarter of 2008.

Analysts predicted VTB Group's net loss at 16.4 billion rubles ($555 million) in the second quarter of 2009 and 36.9 billion rubles ($1.25 billion) in the first six months.

VTB Group attributed its net loss in the first half of the year to growth in provisions for loan impairment.

"Against a difficult economic backdrop, we continue to manage the business with a focus on costs and risk. In the second half of the year, we expect to see signs of improvement and the benefits of a reinforced capital base and, while there is still some uncertainty, we believe we have now passed the lowest point of the economic cycle," VTB Group CEO Andrei Kostin said.

VTB Bank, Russia's second largest in terms of assets, and its subsidiaries comprise the VTB Group, which provides banking services and products in Russia, former Soviet republics, Western Europe, Asia and Africa.