Vozrozhdenie Bank earned record quarterly fees & commissions since the beginning of 2015 under RAS

14 November 2016

Vozrozhdenie Bank published its financial results for 9M 2016 under RAS. The bank earned Rub 225 million of net profit for 9M2016 compared to the net loss of Rub 2.3 billion for the similar period of 2015.

Operating income before provisions for 9M 2016 grew by 3% versus the nine months of the previous year and totaled Rub 13.2 billion. Other income (including income from securities) doubled to Rub 1.8 billion compared to the similar period of 2015 and was the main driver of the operating income growth. Net interest income and net fees & commissions remained close to the level of the previous year: Rub 8.3 and Rub 3.1 for 9 months respectively. Meanwhile both major components of operating income enjoyed positive quarterly dynamics. Net interest income increased by 4% QoQ and net fees & commissions grew by 3% versus Q2, 2016. In Q3 the bank succeeded in earning Rub 1,078 million, the highest fees & commissions income since the beginning of 2015.

The bank also reduced operating expenses to Rub 11.6 billion, a 15% contraction compared to 9M 2015.

The bank’s assets grew by Rub 6 billion (+3%) and as of October 1, 2016 were equal to Rub 224 billion. The bank maintained its traditional structure of assets with a dominating share of net loans (76%), relatively high portion of cash and equivalents (10%), appropriate for a bank with mostly clients’ funding, and a stable proportion of highly liquid securities (9%).

The loan portfolio before provisions1 increased by 4% (or Rub 6.5 billion) since the beginning of the year and amounted to Rub 187 billion as of the reporting date. Retail loans including securitised mortgages rose by 12% during the last 9 months to Rub 59 billion, significantly outpacing the sector growth (+0.4%)2. The corporate loan book’s size didn’t change over the course of the year and remained at Rub 127 billion.

The clients’ funds went up by 11% YtD and exceeded Rub 191 billion as of October 1, 2016. The inflow of corporate customers’ resources, +22% since the beginning of the year to Rub 55 billion (including funds of state and municipal organisations) and the increase in retail savings by 6.5% to Rub 136 billion, enabled the bank to outperform the results of the banking system where clients’ funds fell by 2.2%2. Business results also showed positive trends. In September 2016 the bank tripled the number of accounts opened for its new SME customers versus the same month of 2015. The growth in the number of clients resulted in an increase of balances on transactional accounts and improvement in fees & commissions income.

As of the reporting date the common equity Tier I capital adequacy ratio (N1.1 norm) was 8.2% and the total regulatory capital adequacy ratio (N1.0 norm) was 12.5%, well ahead of the minimum acceptable levels set at 4.5% and 8.0% respectively. The total capital as per the Bank of Russia requirements (complying with Basel III recommendations) slightly declined by 1.5% YtD to Rub 27.6 billion.

1 Hereinafter the loan portfolio numbers are stated according to the Explanatory Information to the Interim Accounting (Financial) Statements and the management reporting

2 As per the Bank of Russia data

Standard & Poor’s positively assessed sustainability of V.Bank business profile
Vozrozhdenie Bank will publish its 9M 2016 IFRS results and hold a conference call for investors on November 24