Third Quarter 2008 IFRS results

9M 2008 IFRS net income of Bank Saint Petersburg grew 36% compared to 9M 2007 and amounted to RUR 1,971 million (USD 81 million)

Financial highlights for 9M 2008*:

  • Assets grew 43% compared with January 1, 2008 and 9% compared with July 1, 2008 and amounted to RUR 181.3 billion (USD 7.5 billion)
  • Net income grew 36% compared to 9M 2007 and amounted to RUR 1,971 million (USD 81 million)
  • Net Interest Margin amounts to 6.17%
  • Cost to income ratio reduced by 1.5 percentage points to 38.7% from 40.2% for YE 2007

*Assets and liabilities of Bank Saint Petersburg are translated into USD at the official average exchange rate quoted by the CBR for the 3Q 2008 (USD 1.00 = RUR 24.24).

“Third Quarter 2008 was successful for us. We continued to increase our assets and in spite of unfavorable market conditions the Bank managed to perform with strong operational results. It allowed us to create additional provisions as an extra cushion for the future which is expected to be anything but simple,” - Alexander Savelyev, the Chairman of the Management Board of the Bank Saint Petersburg, comments. – “Today our priority is to maintain an appropriate liquidity level and high assets quality. Due to conservative policy Bank Saint Petersburg avoided losses on an initial stage of the crisis; we expect to cope with it further”.

As at October 1, 2008 Bank Saint Petersburg was ranked 18th among the Russian banks in terms of assets (24th as at January 1, 2008) and 11th in terms of retail deposits. In 2008 Bank’s assets grew by 43% compared to the average asset growth rate in the Russian banking sector of 22% and in St. Petersburg - of 17%.

Net income for 9M 2008 increased by 36% to RUR 1,971 million (USD 81 million) compared to 9M 2007. Net income for 3Q 2008 amounted to RUR 216 million (USD 9 million).

Net interest income keeps its up trend: it grew more than twice compared to 9M 2007 and amounted to RUR 6,635 million (USD 274 million). Net interest income for 3Q 2008 increased by 8% compared to 2Q 2008 and by 120% compared with 3Q 2007 to RUR 2,601 (USD 107 million). Net interest margin (NIM) increased by 0.16% to 6.17% from 6.01% for July 1, 2008. Net interest income and NIM increase are attributed to business volume growth and increase in interest rates throughout the loan book.

Net fee and commission income increased by 46% to RUR 866 million (USD 35.7 million) compared to 9M 2007. Net fee and commission income for 3Q 2008 increased by 111% compared with 2Q 2008 and by 52% compared with 3Q 2007 to RUR 341 million (USD 14 million). The grow resulted from increased number of Bank’s customers and new services expansion.

ROE decreased 4.1 percentage points to 16.5% compared to January 1, 2008. Cost-to-income ratio decreased by 1.55 percentage points to 38.66% from 40.21% for YE 2007 due to maintained high operational efficiency and cost control.

Equity increased by 13% to RUR 16.9 billion (USD 697 million) compared to RUR 15 million (USD 619 million) in 2007 due to the retained income.  As at October 1, 2008 the Bank’s Tier 1 and total capital adequacy ratios are 9.1% and 11.6% respectively.

Liabilities. Customer accounts, representing the principal source of funding for the Bank amount to 82% of its liabilities. In 2008 customer accounts grew 41% to RUR 135 billion (USD 5.6 billion). The Bank is the 2nd largest in St. Petersburg region in terms of customer deposits and holds around 11% of the deposits market share in St. Petersburg as at October 1, 2008.

Loan portfolio increased by 50% to RUR 138.7 million (USD 5.7 billion) from RUR 92.3 billion as at January 1, 2008. Corporate loans constitute 89% of the total loan book, retail loans – 11%. As at October 1, 2008 the share of overdue loans in the Bank’s portfolio (before provisions) constituted 0.27% of total volume of loans (0.25% as of the end of 2007). The rate of provisions for loan impairment increased by 0.32 percentage points to 2.89% compared with July 1, 2008 in order to meet negative changes in the market environment.

9M 2008 IFRS Financial Statements are available on the Bank’s website.