Bank 1Q 2010 IFRS Results
Financial highlights for 1Q 2010*:
• Net interest income increased by 33.8% to RUB 3.1 billion (USD 104.6 million) compared to 1Q 2009
• Revenues amounted to RUB 4.4 billion (USD 149.3 million)
• Net Income amounted to RUB 349.8 million (USD 11.9 million)
• NIM remained stable and amounted to 5.6%
• Cost/income ratio for 1Q 2010 is 19.9% (down 5.2 pp compared to FY 2009)
*The RUB-nominated figures are translated into USD at the official exchange rate quoted by the CBR for April 1, 2010 (USD 1.00 = RUB 29.50).
Alexander Savelyev, Chairman of the Management Board, commented on the Bank’s 1Q 2010 results
“In 1Q 2010, we have observed the major trends of the year-end 2009 to remain in place. The Bank’s income is still on the pretty high level; the loan portfolio increased slightly. At the same time we are still conservative about creating provisions. I would also like to emphasize, that the net interest margin stabilized at the level of around 5.6%”.
As at April 1, 2010, Bank Saint Petersburg was ranked 13th in terms of retail deposits and 17th in terms of assets among the Russian banks (Interfax ranking). As at June 1, 2010, the number of cards issued by the Bank exceeded 681,000; the Bank’s card network comprised of 443 ATMs. Today, the Bank provides services for over 969,000 individuals and 34,600 corporates. As at June 1, 2010, Internet-Bank was actively used by 62,000 clients.
Among the most significant events of the beginning of the year was a RUB 5 billion bond issue with the coupon rate of 8.1%. Over the course of book building overall demand amounted to RUB 18.6 billion. Proceeds from the issuance will be used to finance lending to real-sector businesses, as well as to bolster the Bank’s retail lending and ongoing operations.
The Bank’s Cost-to-Income Ratio for the 1Q 2010 improved by 5.2 percentage points to 19.9% compared to the FY 2009 result. Bank’s operational expenses are maintained on the level of RUB 859.3 million (+4.4% compared with 1Q 2009; -28.1% compared with 4Q 2009).
Net interest income increased by 33.8% compared with 1Q 2009 and by 0.9% compared with 4Q 2009 amounting to RUB 3.1 billion. Net interest margin (NIM) amounted to 5.6% (5.2% for FY 2009).
Financial markets operations. As at April 1, 2010, an aggregate result from financial markets operations amounted to RUB 886.5 million (-30.5% compared with 1Q 2009; +25.7% compared with 4Q 2009). The result is attributed to the foreign exchange translation gains in the amount of RUB 694.4 million (+30.4% compared with 1Q 2009; +688.6% compared with 4Q 2009) and gains from trading securities in the amount of RUB 685.3 million (+316.0% compared with 1Q 2009; -1.9% compared with 4Q 2009). The losses from trading in foreign currencies amounted to RUB 493.7 million.
Income before provisions and taxes increased by 1.0% compared to 1Q 2009 and amounted to RUB 4.4 billion for 1Q 2010. Net income for 1Q 2010 amounted to RUB 349.8 million (+45.5% compared with 1Q 2009; -4.6% compared with 4Q 2009). The Bank’s return on equity for 1Q 2010 improved to 5.6% from 2.9% for FY 2009.
Liabilities. Customer accounts amounted to RUB 172.9 billion (-4.5% compared to January 1, 2010). As at April 1, 2010, 64% of customer accounts belonged to corporate customers and 36% - to individuals. During 1Q 2010, the volume of retail customer accounts increased by 3.2% while the volume of corporate customer accounts decreased by 8.4%. The decrease in customer accounts contributed to the improvement of the loans to deposits ratio to 92% and therefore supported the net interest margin level. The share of wholesale funding in liabilities remains insignificant (5.7%).
Equity and capital. As at April 1, 2010, the shareholders equity increased by 1.4% to RUB 25.6 billion. The Bank’s total capital decreased by 0.2% to RUB 33.1 billion. As at April 1, 2010, the Bank’s Tier 1 and total capital adequacy ratios were 10.2% and 14.4% respectively.
As at April 1, 2010, Loan portfolio (before provisions) amounted to RUB 178.1 billion (+2.3% compared to January 1, 2010). As at April 1, 2010, corporate loans constituted 92% of the loan book, during 1Q 2010 their volume increased by 2.7% to RUB 163.9 billion. Loans to retail customers amounted to RUB 14.2 billion (-2.9% compared with January 1, 2010).
Loan portfolio quality. As at April 1, 2010, the share of overdue loans in the Bank’s portfolio amounted to 8.6% of the total volume of loans (7.4% as at January 1, 2010). The share of the corporate overdue loans amounted to 8.4% (7.1% as at January 1, 2010); the share of the retail overdue loans amounted to 10.6% (10.1% as at January 1, 2010). Impaired not past due loans for April 1, 2010 constituted 6.3% of the total volume of loans (7.1% as at January 1, 2010). The rate of provisions for loan impairment increased to 10.4% compared with 9.1% as at January 1, 2010.
1Q 2010 IFRS Financial Statements are available on the Bank’s website.