Bank Saint Petersburg 1Q 2009 IFRS Results
Financial highlights for 1Q 2009*:
• Assets grew 1.6% compared with January 1, 2009 and 58% compared with April 1, 2008 and amounted to RUB 219.2 billion (USD 6.5 billion)
• Net income amounted to RUR 240.4 million (USD 7.1 million)
• Net income before provisions and taxes grew by 178% to RUB 3.4 billion (USD 100 million) compared to 1Q 2008 and by 15% compared to 4Q 2008
• Net interest income increased by 42% to RUB 2.3 billion (USD 68 million) compared to 1Q 2008
• Cost/income ratio improved to 19.49% (down 15.17 pp compared to FY 2008)
*The RUB-nominated figures are translated into USD at the official exchange rate quoted by the CBR for April 1, 2009 (USD 1.00 = RUB 33.90.
Alexander Savelyev, Chairman of the Management Board, comments on the Bank’s 1Q 2009 results: “1Q 2009 seriously challenged the Russian banking system – its growth slowed down, the non-performing loans rate grew dramatically. In these circumstances we have focused our efforts on cost cutting and asset quality. Accordingly, we have increased the provision rate for loan impairment which quite naturally affected our 1Q 2009 financial results”.
As at April 1, 2009, Bank Saint Petersburg was ranked 12th in terms of retail deposits and 16th in terms of assets among the Russian banks (Interfax ranking). In the 1Q 2009 the number of cards issued by the Bank exceeded 626,000; the Bank’s card network comprised of 429 ATMs. The Bank provides services for over 35,000 corporate customers and 849,000 individuals.
In the first half of 2009 the Bank has paid particular attention to strengthening its’ capital position. On June 4, 2009, Bank signed the 10.5 years USD 75 million subordinated loan agreement with EBRD. The loan will count towards Bank Saint Petersburg’s Upper Tier II capital under both Russian Central Bank regulations and Basel accord.
In May 2009, Vnesheconombank approved the RUB 1,466 million subordinated loan to Bank Saint Petersburg. On May 28, 2009, the Supervisory Board of the Bank Saint Petersburg has decided to call the extraordinary Shareholders Meeting. The shareholders are to approve amendments to the Bank’s Charter announcing new type of the preferred stock which will provide more flexibility for the Bank in terms of the possible capital increase.
The Bank’s Cost-to-income ratio improved by 15.17 percentage points to 19.49%, being one of the best among the Russian commercial banks. Bank’s operating expenses amounted to RUB 823 million (+11% compared to 1Q 2008; -28% compared to 4Q 2008). Cost control measures remain the key priority of the Bank on all levels.
Net interest income increased by 42% compared to 1Q 2008 amounting to RUB 2.3 billion. Net interest margin (NIM) decreased by 1.24 percentage pointes to 5.23% from 6.47% for FY 2008. Net interest margin decrease is attributed to the exceeding growth rate of the interest bearing liabilities comparing to the growth rate of the interest earning assets as well as to the increased cost of funding.
Financial markets operations. In 1Q 2009 an aggregate result from financial markets operations amounted to RUB 1.3 billion comparing to the loss in the amount of RUB 48 million for 1Q 2008. The result is attributed to the gains from trading in foreign currencies in the amount of RUB 585.5 million (+283% compared to 1Q 2008) and the foreign exchange translation gains in the amount of RUB 532.6 million (-RUB 21 million for 1Q 2008). The gain from trading securities amounted to RUB 164 million; gains from investment securities operations – to RUB 0.7 million.
Net income before provisions and taxes increased by 178% compared to 1Q 2008 and amounted to RUB 3.4 billion. Net income for 1Q 2009 decreased by 62% compared to 1Q 2008 and amounted to RUB 240.4 million; consequently the Bank’s Return on equity decreased to 5.15% (-11.26 percentage points compared to YE 2008). The result was determined by the significant growth in provisions for loan impairment.
Liabilities. Customer accounts amounted to RUB 142.5 billion (-1% compared to January 1, 2009; +39% compared to April 1, 2008). At the end of 1Q 2009, 67% of customer accounts belonged to corporate customers and 33% - to individuals. During first three months 2009 the volume of retail customer accounts increased by 8% while the volume of corporate customer accounts decreased by 5% due to the increased demand for additional funding from the corporate clients. The share of wholesale funding in liabilities remains insignificant (8%).
Equity and capital. In 1Q 2009 shareholders equity increased by 1.4% to RUB 19.1 billion due to the retained income in the amount of RUB 240 million. The Bank’s total capital grew by 2.5% to RUB 24.8 billion from RUB 24.2 billion in FY 2008. As at April 1, 2009, the Bank’s Tier 1 and total capital adequacy ratios were 9.59% and 14.11% respectively.
As at April 1, 2009, Loan portfolio amounted to RUB 141 million (-3% compared to January 1, 2009; +34% compared to April 1, 2008). As at April 1, 2009, retail loans constituted 11% of the loan book, during first three months 2009 their volume remained stable and amounted to RUB 16.7 billion. Loans to corporate customers amounted to RUB 133.2 billion (89% of the total loan book).
Loan portfolio quality. As at April 1, 2009, the share of overdue loans in the Bank’s portfolio amounted to 4.51% of total volume of loans (0.73% as at January 1, 2009). The share of the corporate overdue loans amounted to 4.29% (0.56% as at January 1, 2009); the share of the retail overdue loans amounted to 6.27% (2.12% as at January 1, 2009). Restructured loans constitute 6.7% (6.5% as at January 1, 2009) of the total volume of loans. The rate of provisions for loan impairment increased by 2.08 percentage points to 5.96% compared with 3.88% as at January 1, 2009. The level of coverage of the overdue loans by provisions makes up 132%.
1Q 2009 IFRS Financial Statements are available on the Bank’s website