DGAP-News: Bank Vozrozhdenie earned RUB 768 million ($24 million) of net profit during 9M 2013
(firmenpresse) - EquityStory.RS, LLC-News: Bank Vozrozhdenie / Key word(s): 9-month
figures/Quarter Results
Bank Vozrozhdenie earned RUB 768 million ($24 million) of net profit
during 9M 2013
26.11.2013 / 09:04
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Today Bank Vozrozhdenie reported 9M 2013 IFRS Results with the following
highlights:
- Assets increased by 3.6% from the beginning of 2013 to RUB 216.7
billion ($6.7 bln),
- Operating income before provisions was stable compared to the level of
9M 2012 of RUB 11.0 billion ($339 mln),
- Net income for 9M 2013 equaled to RUB 768 million ($24 mln),
- Cost-to-income ratio for 9M 2013 was 58.0%.
'Decelerating economic trends and unstable market sentiments continued to
persist over the last quarter. Nevertheless, the bank's pro-active targeted
work with customers from its traditional niches, SME and retail, brought
its fruits of ongoing operating results improvement. During the last three
months of the reporting period we focused on the intensive growth of
interest earning assets in order to employ the raised resources more
effectively. Thanks to it we reached an optimal level of loan-to-deposit
ratio and recovered net interest margin to the planned level. However a
need of completing coverage of earlier impaired loans required us to
channel the substantial part of income to provisions that pressed the
bottom line down,' noted Andrey Shalimov, Deputy Chairman of the Management
Board.
Assets rose by 3.6% YTD to RUB 216.7 billion ($6.7 billion) with the most
considerable growth coming in the second quarter. During Q3 2013 the bank
improved the share of interest-earning assets by 2.9 pps to 78.4% by
allocating excess cash in loans and securities. As a result loan portfolio
growth surpassed that of customer accounts and loan-to-deposit ratio went
up by almost 3 p.p. to 101.5%.
Loan portfolio before provisions surged by 11% from the start of the year
to RUB 173 billion ($5.4 billion) in accordance with the bank's business
plan. In Q3 2013 total portfolio growth accelerated on the back of retail
and corporate lending expansion. Loans to corporates were up 1.9% QoQ and
totaled Rub 132.6 billion ($4.1 billion). For the last 3 months, the bank
improved penetration in its core SME segment - loans to the SME borrowers
rose by 2% to RUB 80.0 billion ($2.5 billion) due to active promotion of
the bank's lending products among existing customers and new clients.
Lending to large corporates grew by RUB 1.2 billion to RUB 52 billion ($1.6
billion) contributed by mainly on the back of issuing a handful of loans to
new customers. Breakdown of corporate loans by economic sectors remains
unchanged, the major shares of 36% and 26% belong to manufacturing and
trade.
Intensive expansion of lending to individuals brought the retail loan
portfolio to RUB 40.5 billion ($1.3 billion), up 23% since the beginning of
2013. In the third quarter the bank's retail loan book growth outpaced the
banking sector with 10.2% expansion versus 6.9% average growth for the
system. On a quarterly basis, mortgages were the key driver with RUB 2.7
billion increase to RUB 27.6 billion ($0.9 billion) attributable to two
factors: exceptional popularity of the bank's partnership programs with
developers and lowering the interest rate on such loans by 50 bps.
Consumer, car and bank cards loans advanced by 8.3% for the quarterreaching RUB 12.9 billion ($0.4 billion).
Loan portfolio quality slightly weakened during the reporting quarter, and
share of non-performing loans (NPLs) in total loans grew by 41 bps to
10.75%. Growth of NPLs in the corporate portfolio was associated with
impairment of one mid-sized borrower's indebtedness, the most part of which
has been covered by provisions. Technical overdue in mortgages reasoned NPL
growth in the retail segment. As of November 1, 2013 most of this overdue
amount was redeemed by customers.
In Q3 2013 the bank charged RUB 1.3 billion ($40.8 million) to provisions
for loan portfolio impairment implying cost-of-risk of 3.1%. It kept
accumulating provisions on large corporate loans that were impaired
earlier, coverage ratio for the corporate loan book exceeded 100%. Total
amount of delinquent loans was covered by provisions by 97%, NPLs with more
than 90 days overdue - by 108%.
Customer funds were up 4.1% since beginning of the year and reached RUB
170.5 billion ($5.3 billion). In the mid of the 3rd quarter the bank cut
retail deposit rates and did not participate in fierce competition for
corporate deposits focusing on employing the available resources. Hence,
corporate client funds did not change during the quarter and were RUB 61.6
billion ($1.9 billion), while its structure shifted to current accounts
which were up by 2.7% to RUB 36.8 billion ($1.1 billion). Retail funds grew
by 1.3% compared to the previous quarter and reached RUB 108.9 billion
($3.4 billion) supported by RUB 3.5 billion inflow of individuals'
deposits.
Shareholders' equity rose by 3.9% YTD to RUB 21.6 billion ($0.7 billion).
Tier 1 Capital Adequacy ratio stood at 11.4%, Total Capital Adequacy ratio
- at 13.2% as of the reporting date. Lower total CAR was attributable to
repayment of the subordinated loan raised in 2008 from German and Dutch
development institutions DEG and FMO.
Interest income of the bank for 9M 2013 grew by 15.3% versus same period of
the previous year to RUB 14.0 billion ($433 million) fueled by retail
lending share widening in the total loan book as well as by increase of
average yield on loans. During the reporting period interest expenses added
30.8% to RUB 7.2 billion ($222 million) reflecting the market trend of
clients funds' cost growth that persisted during the first part of the
year. However in the course of the last three months resources cost
progress slowed down to 3.5% from 6.1% during the Q2 2013 that positively
influenced the dynamic of net interest income advancing throughout the last
quarter by 8.3% to RUB 2.4 billion ($75 million) (+2.6% in Q2 2013). Total
net interest income for 9M 2013 grew by 2.6% compared to the result of the
similar period of 2012 to RUB 6.8 billion ($211 million). Net interest
margin continued its recovery rising to its target level of 4.5% in Q3
2013. Quarterly improvement of yields on net IEA to 11.80% (+34 bps per
quarter) again outperformed evolution of funding cost totaling 5.14% (+10
bps per quarter). Therefore net interest spread widened in the course of Q3
2013 by 24 bps going up to 6.66%.
During 9M 2013 the bank earned RUB 4.0 billion ($124 million) as fees and
commissions that was practically equal to the result of 9M 2012. There was
an increase of the share of settlement operations fees as well as bank card
transactions fees in the structure of the fee income (30% and 26% for Q3
2013 respectively). Throughout the reporting period we saw a gradual
recovery of fees from cash collection (+5% per the last quarter). On the
contrary, fees and commissions expenses experienced 56% rise compared to 9M
2012 and stood at RUB 0.5 billion ($14 million) causing a decrease in net
fees and commissions by 4.5% to RUB 3.6 billion ($110 million). However
during the last quarter net fees grew by 2.6% and equaled RUB 1.25 billion
($39 million).
Operating income before provisions for Q3 2013 went up by 3.8% QoQ to RUB
3.8 billion ($118 million) contributed mainly by widening of the interest
income. The proportion of non-interest revenues in total operating income
was equalto 36.4% for Q3 2013.
Operating expenses remained unchanged at the level of Q2 2013 and totaled
RUB 2.1 billion ($66 million). 9M 2013 OPEX grew in comparison with the
result of the same previous year period just by 2.1% to RUB 6.4 billion
($197 million). Expenses structure was stable with approximately 60% of
them represented by personnel costs. Q3 2013 cost-to-income ratio slipped
to 56.0% improving by 218 bps on QoQ basis. The ratio for 9M 2013 was
58.0%.
Operating profit before provisions enjoyed positive dynamic for the third
quarter in a row. For the last three months the result jumped by 9.3% to
RUB 1.7 billion ($52 million) proving the bank's business model capacity to
generate stable operating income. The ratio of profit before provisions and
taxes to equity kept recovering and grew over the quarter by 234 bps to
31.2% In order to finalize the process of covering earlier impaired loans
with provisions the bank maintained quite impressive level of charges to
provisions. It weighted on the net profit for 9M 2013 bringing it down by
57% versus the bottom line of the same period of 2012. The financial result
totaled RUB 768 million ($24 million) producing ROE of 4.8%. Nevertheless
on a quarterly basis the net profit rebounded by 31.4% to RUB 247 million
($7.6 million).
End of Corporate News
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Language: English
Company: Bank Vozrozhdenie
7/4 Luchnikov Pereulok, bldg. 1
101990 Moscow
Russia
Phone: +7 (495) 620-90-71
Fax: +7 (495) 620-19-99
E-mail: investor(at)voz.ru
Internet: www.vbank.ru
ISIN: RU0009084214
End of News EquityStory.RS, LLC News-Service
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241640 26.11.2013
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