Bank Saint Petersburg 9M and 3Q IFRS Results
Financial highlights for 9M 2009*:
• Assets grew 0.8% compared with January 1, 2009 amounting to RUB 217.5 billion (USD 7.2 billion)
• Revenues grew by 52.8% to RUB 10.7 billion (USD 356.6 million) compared to 9M 2008
• Net interest income increased by 11.0% to RUB 7.4 billion (USD 245.5 million) compared to 9M 2008
• Net Income amounted to RUB 273.5 million (USD 9.1 million)
• Cost/income ratio for 9M 2009 is 24.1% (down 10.6 pp compared to FY 2008)
*The RUB-nominated figures are translated into USD at the official exchange rate quoted by the CBR for October 1, 2009 (USD 1.00 = RUB 30.00.
Commenting on the 9M 2009 results and the Bank’s recent developments, the Chairman of the Management Board of Bank Saint Petersburg Mr. Alexander V. Savelyev said: “Despite overall challenging market conditions we continue to develop our business. The Bank consistently generates substantial revenues; we have also noticed first signs of stabilization within our loan portfolio. It was also of high importance for us to prove our ability to raise equity from the market for further development. In December 2009, we attracted around USD 200 million through the public offering of the convertible preferred shares. It is a new financial instrument on the market, and we are satisfied with the result of the placement”.
As at October 1, 2009, Bank Saint Petersburg was ranked 13th in terms of retail deposits and 17th in terms of assets among the Russian banks (Interfax ranking). The Bank provides services for over 35,000 corporate customers and 900,000 individuals. Today the Bank’s branch network is comprised of 37 branches and 440 ATMs; as at October 1, 2009 the number of cards issued by the Bank exceeded 665,000.
During 9 months 2009 the Bank has focused its efforts on capital base strengthening. In June, the Bank received the 10.5 years USD 75 million subordinated loan from EBRD; in August, it received the RUB 1,466 million subordinated loan from Vnesheconombank.
In December 2009, the Bank attracted ca. USD 200 million through the offering of class A preferred shares. New type of stock is mandatory convertible into the ordinary shares on May 15, 2013 (one-to-one ratio) and bears a dividend of 13.5% of the placement price in USD. Adjusted for the equity raised from the offering the Bank’s total capital adequacy ratio should amount to approximately 17%, Tier 1 ratio – to 12%.
The Bank’s Cost-to-Income Ratio for the 9M 2009 improved by 10.6 percentage points to 24.1% compared to the FY 2008 result. Bank’s operational expenses are maintained on the rather low level of RUB 2,579 million (-4.7% compared to 9M 2008) as cost control remains the key priority.
Net interest income increased by 11.0% compared to 9M 2008 amounting to RUB 7.4 billion. Net interest margin (NIM) for 3Q 2009 improved to 5.5% compared to 4.9% for 2Q 2009. The quarter on quarter recovery is attributed to the growth of interest earning assets as well as to the cost of funding decrease.
Financial markets operations. As at October 1, 2009, an aggregate result from financial markets operations amounted to RUB 2.1 billion comparing to the loss of RUB 696.4 million for 9M 2008. The result is attributed to the gains from trading securities in the amount of RUB 1.0 billion (-RUB 1.2 billion for 9M 2008) and the trading in foreign currencies in the amount of RUB 735.7 million (RUB 852.0 million for 9M 2008). The foreign exchange translation gains amounted to RUB 491.5 million (-RUB 358.3 million for 9M 2008).
Net income before provisions and taxes increased by 52.8% compared to 9M 2008 and amounted to RUB 10.7 billion. Net income for 9M 2009 amounted to RUB 273.5 million; net income for 3Q 2009 amounted to RUB 322.2 million (+49% compared to 3Q 2008). The Bank’s return on equity for 3Q improved to 6.8%, consequently the return on equity for 9M 2009 amounted to 1.9%.
Liabilities. Customer accounts amounted to RUB 146.2 billion (+1.4% compared to January 1, 2009; +8.5% compared to October 1, 2008). At October 1 2009, 63% of customer accounts belonged to corporate customers and 37% - to individuals. During 9M 2009, the volume of retail customer accounts increased by 11.8% while the volume of corporate customer accounts decreased by 3.9%. The share of wholesale funding in liabilities remains insignificant (8.5%).
Equity and capital. As at October 1, 2009 the shareholders equity increased by 0.7% to RUB 18.9 billion mainly due to the retained income. The Bank’s total capital grew by 13.2% to RUB 27.4 billion from RUB 24.2 billion for FY 2008. As at October 1, 2009, the Bank’s Tier 1 and total capital adequacy ratios were 8.7% and 14.1% respectively.
As at October 1, 2009, Loan portfolio (before provisions) amounted to RUB 159.4 billion (+5.7% compared to January 1, 2009; +11.6% compared to October 1, 2008). As at October 1, 2009, retail loans constituted 9.5% of the loan book, during 9M 2009 their volume decreased by 9.9% to RUB 15.0 billion. Loans to corporate customers amounted to RUB 144.3 billion (+7.7% compared to January 1, 2009).
Loan portfolio quality. As at October 1, 2009, the share of overdue loans in the Bank’s portfolio decreased to 6.9% of the total volume of loans compared to 7.5% as at July 1, 2009. The decrease is attributed to the recovery process and the growth of the gross loan portfolio. The share of the corporate overdue loans amounted to 6.7% (7.5% as at July 1, 2009); the share of the retail overdue loans amounted to 9.4% (8.0% as at July 1, 2009). Restructured loans constituted 7.9% of the total volume of loans (6.6% as at July 1, 2009). The rate of provisions for loan impairment increased to 8.5% compared with 7.3% as at July 1, 2009.
9M 2009 IFRS Financial Statements are available on the Bank’s website.