Vozrozhdenie Bank has announced RAS results for 9M 2015

11 November 2015

Vozrozhdenie Bank has published its RAS results for 9M 2015.

As of October 1, 2015, the bank’s assets totaled RUB 200.0 billion, 11.5% down compared to the year-start primarily due to contraction of net loan indebtedness. Loan portfolio before provisions* stood at RUB 165.2 billion, 5.8% down YtD. The contraction was driven mainly by a decrease of corporate loans by 11.0% YtD to RUB 114.6 billion amid subdued business activity, the lack of high-quality borrowers and the sale of a number of exposures. The persisted demand for mortgages and consumer loans supported the growth of retail lending. During 9M 2015 retail loan portfolio, including securitised mortgages, added up 8.5% (versus 5.1% drop in the sector according to the Bank of Russia data) and reached RUB 50.6 billion as of the end of the reporting period.

Adhering to its conservative risk management policy, the bank charged RUB 1.7 billion to provisions during 9M 2015, 46.6% below the level of the same prior-year period. Loan loss provisions accounted for RUB 1.4 billion. Lower charges are attributable to the recovery of provisions against corporate exposures sold in Q3 2015 in the amount of RUB 5.9 billion. As of October 1, 2015, total provisions for possible losses reached RUB 21.8 billion, loan loss provisions — RUB 19.4 billion.

Customer funds dropped by 8.5% YtD and amounted to RUB 162.5 billion as of October 1, 2015. The bank sees no need to compete for the expensive resources amid limited qualitative loan demand, so corporate funds were reduced by 14.3% YtD to RUB 46.8 billion. Funds of individuals and individual entrepreneurs account for 65.0% of the bank’s liabilities remaining the primary funding source despite some contraction of 6.0% YtD to RUB 115.7 billion. The major decline fell on the third quarter (‑7.7% QoQ) as some large clients changed their banking preferences. In September the situation stabilised not affecting the core client base.

Capital of the bank decreased by 8.9% YtD to RUB 23.9 billion according to Basel III standards mainly due to losses incurred. The total regulatory capital adequacy ratio (N1.0 norm) contracted by 0.3 pps YtD to 11.7% with the minimum acceptable level at 10%. The common equity Tier1 capital adequacy ratio (N1.1 norm) added 0.7 pps over the same period and reached 10.0%, significantly above the minimum requirement of 5%.

The bank’s operating income before provisions for 9M 2015 grew by 18.7% to RUB 12.9 billion versus the same prior-year period. Expansion of the retail loan portfolio and mounting loan yields contributed to net interest income growth by 19.7% to RUB 8.5 billion. Positive dynamics of net non-interest income that increased by 16.8% YoY to RUB 4.4 billion was driven by income from operations on the financial markets.

Net loss for 9M 2015 amounted to RUB 2.3 billion versus RUB 2.2 billion of net profit for 9M 2014 due to the growth of operating expenses by 115.3% YoY to RUB 13.7 billion, RUB 7.2 billion of which were comprised by costs on sale of claims on credit agreements and property received as collateral in Q3 2014.

Please note that IFRS consolidated financial statements of Vozrozhdenie Bank for 9M 2015 will be published on November 24, 2015.

* Hereinafter loan and deposit portfolio figures are provided in accordance with internal reporting forms of Vozrozhdenie Bank.

Konstantin Basmanov appointed as the Chairman of the Management Board of Vozrozhdenie Bank
Vozrozhdenie Bank will publish its 9M 2015 IFRS results and hold a conference call for investors on November 24