DGAP-News: Bank Vozrozhdenie: Bank Vozrozhdenie earned RUB 521 million of net
profit during H1 2013
EquityStory.RS, LLC-News: Bank Vozrozhdenie / Key word(s): Half Year
Bank Vozrozhdenie: Bank Vozrozhdenie earned RUB 521 million of net
profit during H1 2013
27.08.2013 / 09:58
Today Bank Vozrozhdenie reported H1 2013 IFRS Results with the following
- Net income for 6M 2013 equaled to RUB 521 million ($16 mln)
- Assets grew by 11% over the last 12 months to RUB 216.2 billion ($6.6
- Operating income before provisions stood at the level of H1 2012 of RUB
7.2 billion ($219 mln)
- Cost-to-income ratio for H1 2013 was 59.0%
'During the first half of 2013 the bank was faced with the environment of
fierce competition for creditworthy borrowers amid dawning trends of
corporate lending stagnation, decelerating growth of personal income and
declining rates on fee- and interest-generating products. Nevertheless we
managed to increase both interest and non-interest income by 11% compared
to the same prior-year period and keep operating income at H1 2012 level
due to intensive work with existing clientele base as well as initiating
cooperation with new customers from target segments. Adequate operating
expenses management and right priorities set in the financial plan helped
to secure cost-to-income ratio within the target range and improve Q-o-Q
operating profit. However provisioning necessary for the business long-term
stability continues to be the key factor for financial performance of the
bank,' noted Tatiana Gavrilkina, Deputy Chairwoman of the Board.
'Small and medium-sized enterprises remain the bank's key clients segment.
We continue to be actively involved in financing such companies including
participation in various state programs of SME support. We tend to offer
the most favorable terms of lending to our customers supporting their
business and thereby inducing growth of SME loan portfolio. In August, Bank
Vozrozdenie granted an investment loan to a mid-sized company under the
state guarantee. That guarantee was the very first one in the country
issued as a part of the federal guarantees mechanism which initiation
became the most expected event in the market of SME state support,' added
Liudmila Goncharova, Deputy Chairwoman of the Board.
'In the retail segment we strive to boost sales via remote channels. In the
nearest future we plan to expand the range of solutions available for the
user in our 'Vbank with you' service, ATMs and payment terminals - we'll
increase the number of companies that can get payments made by individuals,
add new deposits with remote opening feature and option of making payments
to any recipient', commented Mark Nakhmanovich, Deputy Chairman of the
Assets rose by 3.4% YTD to RUB 216.2 billion with the main growth of 2.8%
coming in the second quarter. The share of liquid assets which include cash
and cash equivalents, due from banks and trading portfolio of liquid
securities widened from 21.7% to 22.5% over the quarter. Net interest
earning assets accounted for 75.5% of the total assets as of June 30, 2013.
Loan portfolio before provisions advanced 6.8% YTD to RUB 166.9 billion on
the back of new lending to corporate clients as well as retail loan book
increase. In Q2 2013 the growth decelerated to 1.7%. Corporate loans
didn't change over the quarter but its structure experienced some
realigning in favor of large loans (over RUB750 million) due to utilization
of previously approved credit facilities and moving of several clients to
the category of large corporates thanks to their business growth and
respective widening of lending. The bank's loan portfolio is
well-diversified across industries with largest shares in manufacturing
(29%) and wholesale and retail trade (22%). The bank also actively supports
companies involved in construction, transport industry, agriculture etc.
Retail loan portfolio expanded by 11.9% over H1 2013 to RUB 36.8 billion as
of June 30, 2013, adding during the last quarter RUB3.2 billion on the back
of intensive mortgage and consumer lending. Reduction of rates on loans for
apartments purchase made in March 2013 became the main driver of mortgages
growth by 9% (+ RUB 2.1 billion) over the second quarter. Consumer lending
rose 13.7% (+RUB 1.1 billion) in the course of the last three months to RUB
9.4 billion as at the end of the period.
Loan portfolio quality stabilized with NPL ratio remaining unchanged over
the second quarter at 10.3%. Minor changes of impaired loans volume by 3.2%
resulted from revaluation of its foreign-currency denominated part as well
as from slight deterioration of middle-size companies' loans quality. In
retail lending the share of overdue and impaired loans stayed intact at
1.8% for mortgages and 5.4% for other loans to individuals. During the
second quarter of 2013 the bank charged RUB1.3 billion to provisions for
loan impairment, bringing NPL coverage ratio to 98% (+5p.p.). It's worth
mentioning that 82.3% of new provisioning went to cover two exposures to
large corporates impaired during the previous periods. NPL coverage of
loans 90 days + overdue improved to 123%.
Customers' funds added up 3.3% YTD to Rub 169.3 billion as of June 30,
2013. Insignificant decline at the end of the first quarter was followed by
3.6% growth during the last three months, resulting first of all from the
retail term deposits inflow of RUB 3.0 billion (+3.5%). In the course of
the second quarter individual customers preferred to make savings for the
term of 18 months. Total increase of retail clients' funds by 4.5% during
the period made them equal to RUB 107.5 billion as of the end of Q2 2013.
Corporate customers' funds grew by 1.7% over the last quarter to 60.1
Shareholders' equity growth by 0.9% during the last three months was
reasoned by retained earnings. Tier 1 Capital Adequacy ratio and total CAR
were 11.7% and 14.6% respectively. Since May 2013 the bank started to
report BASEL III capital adequacy norms. As of July 01, 2013 core capital
adequacy (regulatory norm H1.1) equaled to 9.3% while Total Capital (Tier 1
Capital plus Tier 2 Capital) Adequacy (regulatory norm H1.0) totaled
During the recent three months yields on loans went upside driven by decent
rebound of corporate loan book at the end of Q1 2013. It helped to offset
increase of interest expenses by 6.1% to RUB 2.4 billion reasoned by
raising new deposits under higher rates and enabled net interest income
augmentation by 2.6% to RUB 2.2 billion for the period. Widening of yields
on net interest earning assets to 11.46% (+22 b.p. over the quarter)
outpaced growth of funding costs to 5.04% (+20b.p. over the quarter)
leading to improvement of spread by 2 b.p. to 6.42% and NIM by 4 b.p. to
Net fees and commissions rose by 9.8% over the second quarter to RUB1.2
billion supported by expansion of settlement operations of both retail and
corporate clients (+32% during the period).
Trading income elevated by 12.6% during the last quarter. The bank was
successful in exploiting chances provided by FX rates volatility with total
benefit from FX operations and FX revaluation amounting to RUB 172 million,
up by 24.6% versus result of Q1 2013.
Operating income before provisions grew by 5.1% to RUB 3.7 billion in
comparison with the first quarter while the share of non-interest revenues
recovered to 39%.
Operating expenses added 2.1% versus Q1 2013 and totaled RUB 2.1 billion
for the last three months. Moreover, in comparison with the first half of
2012 operating expenses for six months of 2013 went up by just 1.2%.
Personnel costs in the amount of RUB 1.3 billion for Q2 2013 continued to
be the main element of total expenses structure with over 75% represented
by compensations to sales managers, specialists and service personnel of
the bank. Furthermore the cost-to-income ratio kept improving and declined
by 1.7 b.p. to 58.2% in Q2 2013.
Operating profit before provisions went up by 9.5% in Q2 2013 reflecting
healthy results of the bank operations. Ratio of profit before provisions
and taxes to equity improved during the quarter by 216 b.p. to 28.8%
However significant charges to provisions required to increase coverage on
earlier impaired loans weighted on quarterly net profit and pressed it down
to RUB 188 million (-43.5% compared to the previous quarter). Net
profit for H1 2013 totaled RUB 521 million resulting in ROE of 4.9% for the
End of Corporate News
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Company: Bank Vozrozhdenie
7/4 Luchnikov Pereulok, bldg. 1
Phone: +7 (495) 777-0-888
Fax: +7 (495) 620-1999
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