By Andrey Ostroukh

SOCHI, Russia--Russia's second-largest lender, VTB Bank (VTBR.MZ), expects its revenues for 2014 to be hit by the crisis in Ukraine crisis and a need to protect itself from the effects of possible domestic bankruptcies, its chief executive said Friday.

Having posted a record net profit in 2013 on the back of strong balance-sheet growth stemming from a secondary public offering in May and the robust performance of its retail business and transaction banking unit, the bank's net profit plunged 98% in the first quarter as the Ukrainian crisis started.

Chief Executive Andrei Kostin said he "doesn't bet on big profits this year" and instead the bank prefers to build up its reserves. Speaking on the sidelines of an investment conference in the Black Sea town of Sochi, Mr. Kostin said he expects the debt-repayment situation from Ukraine to worsen.

VTB, which has a significant presence in Ukraine, has already seen higher risk-associated costs along with weaker results from securities and foreign currencies.

Mr. Kostin said VTB in Ukraine is now receiving only a half of its debt repayments as some of its clients are based in Luhansk and Donetsk regions, the epicenter of the stand-off between Ukrainian troops and pro-Russia separatists.

In 2013, the bank ended the year with 100.5 billion rubles ($2.61 billion) in net profit.

Write to Andrey Ostroukh at andrey.ostroukh@wsj.com

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