Bank Announces 2007 9-Month IFRS Results

Bank Saint Petersburg (hereinafter referred to as “the Bank” or BSPB) has announced its unaudited financial results for the first nine months of 2007, as of September 30, prepared in accordance with International Financial Reporting Standards (IFRS).  This announcement follows the completion of the quiet period after the Bank’s IPO.

    * The Bank’s assets increased by 60% since the start of the year to more than 97 billion rubles;
    * Net profit grew 1.9-fold year-on-year reaching 1.4 billion rubles; net profit in Q3 totaled 600 million rubles;
    * Equity increased by 81% to 8.2 billion rubles;
    * Return on equity totaled 30.5%;
    * Return on assets totaled 2.5%;
    * Client deposits increased by 26.9 billion rubles to 71.7 billion rubles;
    * Net interest income before the creation of provisions increased to 3.1 billion rubles, representing year-on-year growth of 62.1% from the same period in 2006.

“We have achieved substantial growth, as evidenced by our key performance indicators, and we have also continued to increase our efficiency,” said Alexander Savelyev, Chairman of the Management Board of Bank Saint Petersburg. “The success of the Bank’s development strategy led to a successful IPO in November, and has been re-confirmed by our results.”
The Bank’s assets exceed 97 billion rubles, having increased by 60% over the last nine months. Loans and advances to clients comprise a major part of the Bank’s assets, making up 76.1% of its portfolio.  The Bank’s loan portfolio increased by 34.2 billion rubles to 73.9 billion rubles in the first nine months of 2007.
The quality of the Bank’s loan portfolio remains high; the volume of overdue loans stayed at 0.4% of the Bank’s total loan portfolio.  The Bank continues to apply a conservative strategy in terms of provisions for potential losses from client advances. Provisions are 7.6 times greater than overdue loans.

Client deposits are still the Bank's main source of funding, comprising 81% of the Bank's liabilities at the end of September.  This reflects a high degree of client loyalty, which is a significant advantage given vulnerable international financial markets. The volume of client deposits increased by 26.9 billion rubles to 71.7 billion rubles in the first nine months of 2007.

Over the last nine months, the Bank’s equity has grown by 3.6 billion rubles to 8.2 billion rubles. This is attributed to 1.6 billion rubles in shares issued by the Bank at the beginning of the year, as well as to this year’s profit and to a market revaluation of the Bank’s assets.

The Bank’s operating income increased by 72% to 3.4 billion rubles. Administrative and other operating expenses have increased by 39% to 1.4 billion rubles, which corresponds with the Bank’s growth rates.  Five new offices have opened over the last nine months.

The Bank continues to work to improve its efficiency: over the first nine months of 2007, the percentage of expenses from pre-provision operating income decreased from 43% in 2006 to 37%.

Over the last nine months, the Bank demonstrated record profits.  Profit before tax increased to an all-time high of 1.9 billion rubles, representing growth of 2.1 times year-on-year. After 482 million rubles in taxes, the Bank’s net profit totaled 1.4 billion rubles, compared to 753 million rubles in the first nine months of 2006.

Bank Saint Petersburg’s IFRS Balance Sheet and Income Statement for the first nine months of 2007