1H 2008 IFRS Results

1H 2008 IFRS net income of Bank Saint Petersburg doubled compared to the 1H 2007 and amounted to RUR 1,755 million (USD 74 million)

Financial highlights:

  • Net income doubled compared to 1H 2007 and amounted to RUR 1,755 million (USD 74 million)*
  • Net interest margin increased to 6.0 % compared to 5.5 % as at Y2007
  • Assets increased by 31% to RUR 165.7 billion (USD 7 billion) from January 1, 2008
  • Return on equity (ROE) is 22.1% compared to 20,6 % in Y2007
  • Cost to income ratio reduced by 4.5 percentage points to 35.7% from 40.2% for Y2007
*Assets and liabilities of Bank Saint Petersburg are translated into USD at the official average exchange rate quoted by the CBR for the 2Q 2008 (USD 1.00 = RUR 23.63).

“In 1H 2008 Bank Saint Petersburg proved its efficiency and adaptability by responding promptly to unstable market conditions and cost of funding increase. It resulted in significant improvement of financial results accompanied by high assets quality and impressive operational efficiency,” - Alexander Savelyev, the Chairman of the Management Board of the Bank Saint Petersburg comments. – “While the market liquidity is limited we remain confident  due to the prevailing volume of customer accounts in the Bank’s liabilities. At the same time we remain active on the capital markets and having attracted more than USD 200 million in 1H 2008.  We decided to move an SPO to 2009 and to satisfy our capital requirements by means of high profitability and subordinated debts”.

As at July 1, 2008 Bank Saint Petersburg was ranked 21st among the Russian banks in terms of assets (24th as at January 1, 2008), 11th in terms of individual deposits and 16th in terms of corporate lending. In 1H 2008 the number of Bank’s corporate clients increased by 4 thousands and reached 32 thousands; the number of retail customers increased by 144 thousands and reached 700 thousands. The Bank has installed 53 new ATMs.

Return on equity (ROE) amounted to 22.1% and increased by 5.4 percentage points compared to 1Q 2008 and by 1.5 percentage points compared to Y2007.

Net income for 2Q 2008 increased by 74% to RUR 1,115 million (USD 48 million) compared to 1Q 2008. Net income for 1H 2008 doubled compared to 1H 2007 and amounted to RUR 1,755 million as a result of the net interest margin increase accompanied by high assets quality and operational efficiency improvement.

Net interest income increased by 113% to RUR 4,034 million (USD 170.7 million) compared to 1H 2007.

Net interest margin increased to 6.0 % in 1H 2008 compared to 5.5% for Y2007 primarily due to the increased interest rates on lending operations.

Cost-to-income ratio remains one of the lowest in the sector and amounts to 35.7% (compared to 40.2% for Y2007) which underlines the Bank’s focus on operational efficiency. 

Net fee and commission income increased by 41% to RUR 525 million (USD 22.2 million) compared to 1H 2007 due to increase in volume and efficiency of transactions.

Equity increased by 11 % to RUR 16.7 billion (USD 707 million) in 1H 2008 due to the retained income.  As at July 1, 2008 the Bank’s Tier 1 and total capital adequacy ratios are 10% and 12.8% respectively.

Liabilities. Customer accounts, representing the principal source of funding for the Bank, increased by 31% to RUR 126.1 billion for 1H 2008 and amounted to 85% of the Bank’s liabilities. The Bank is the 2nd largest in St. Petersburg region in terms of customers deposits and holds around 11% of the deposits market share in St. Petersburg as at 1H 2008. As at July 1, 2008 the wholesale funding contributes 10% to total liabilities.

Loan portfolio increased by 30% to RUR 119.6 million (USD 5 billion) for the 1H 2008. The corporate loan portfolio increased by 28% and contributes 89.5 % to the total loan book while retail lending increased by 52% and represents remaining 10.5%. The Bank continues to decrease the construction and real estate operations exposure, its share decreased by 3.3 percentage points in 1H 2008 to 26.4 % of the total loan book.

The loan portfolio quality. As at July 1, 2008 the share of overdue loans in the Bank’s portfolio (before provisions) is 0.13% of total volume of loans (0.25% as of the end of 2007). The rate of provisions for loan impairment remains at the level of 2.57 % as at July 1, 2008.

1H 2008 IFRS Financial Statements are available on the Bank’s website.