UPDATE 1-Russian bank VTB says on track for record profit in 2024

Adds new information, VTB Deputy CEO quotes in paragraphs 4-10

MOSCOW, Dec 25 (Reuters) - Russia's second largest lender VTB said it will make a record profit in 2024 after reporting a January-November net profit of 452.2 billion roubles ($4.54 billion) - more than its entire full-year profit for 2023.

The bank said it was still on track to hit the profit target of 550 billion roubles in 2024 despite a significant depreciation in the value of many of its assets in November as a result of monetary tightening.

"It was a month of massive destruction of market asset values," said First Deputy CEO Dmitry Pyanov. He said that the bank's earnings on interest fell by almost one third as retail lending growth halted due to high interest rates.

The central bank kept its interest rate on hold at 21% during its Dec. 20 board meeting, surprising the market, which expected another hike. It cited a slowdown in lending as one of the reasons behind the decision.

Pyanov said although the retail lending portfolio was shrinking for the second consecutive month, VTB did not observe a slowdown in corporate lending, which had grown by 2.5% in November and by 20.2% since the start of the year.

"We will have a growth strategy that involves a decrease in retail and an increase in corporate lending," Pyanov said. He described the central bank's decision as a "pleasant surprise" and said VTB now anticipates the key rate to remain at 21% for some time.

The primary reason for continued growth in corporate lending at current interest rates is that loans to important sectors, such as the military-industrial complex, are still subsidised by the state, resulting in lower actual rates for some borrowers.

Russian banks have also been accumulating trillions of roubles from individuals' deposits in recent months as people moved their money to the banks, taking advantage of short-term deposit interest rates reaching 26%.

"In the new macroprudential environment, it makes sense from the perspective of maximizing return on capital to borrow from individuals and lend to corporate clients," Pyanov said.

($1 = 99.5000 roubles)

(Reporting by Elena Fabrichnaya, writing by Gleb Bryanski; editing by Guy Faulconbridge, Alexandra Hudson)

((gleb.bryanski@thomsonreuters.com;))