Bank FY 2010 IFRS Results
Financial highlights for FY 2010*:
• Net income for FY 2010 increased by 542.6% compared with FY 2009 to RUB 4.1 billion (USD 135.6 million);
• Net interest income for FY 2010 increased by 15.4% compared with FY 2009 to RUB 12.0 billion (USD 396.2 million);
• Loan portfolio increased by 16.2% compared with January 1, 2010 to RUB 202.3 billion (USD 6.7 billion);
• As at January 1, 2011, the share of overdue loans decreased to 5.1% of the loan portfolio (7.4% as at January 1, 2010);
• FY 2010 Return on equity (ROAE) amounted to 15.3% while ROAE for 4Q 2010 jumped to 26%
*The RUB-nominated figures are translated into USD at the official exchange rate quoted by the CBR for January 1, 2011 (USD 1.00 = RUB 30.35).
Alexander Savelyev, Chairman of the Management Board, commented on the Bank’s FY 2010 results: “2010 was marked by a dramatically increased competition and a corresponding slash in interest rates. On this background we are happy with our performance. We continued to grow ahead of the market, leaving the peak of provisions behind us. Even more important was the comeback to pre-crisis profitability levels later in the year. We are pleased to be back to normal healthy banking”.
As at January 1, 2010, Bank Saint Petersburg was ranked 14th in terms of retail deposits and 16th in terms of assets among the Russian banks (Interfax ranking). As at January 1, 2011, the number of cards issued by the Bank exceeded 700 thousand; the Bank’s ATM network comprised of 468 units. Today, the Bank provides services to over 1 million individuals and 35 thousand corporates. As at January 1, 2010, Internet-Bank was actively used by 78 thousand clients.
In October, Moody’s Investors Service changed the outlook on the Bank’s Ba3 ratings to stable from negative.
Net interest income for FY 2010 increased by 15.4% compared with FY 2009 amounting to RUB 12.0 billion. Quarterly net interest income remains flat for 5 quarters in a row: net interest income for 4Q 2010 amounted to RUB 3.0 billion. Net interest margin (NIM) amounted to 4.9% (5.2% for FY 2009). NIM for 4Q 2010 decreased to 4.7% comparing with 5.1% for 3Q 2010. Pressure on NIM is explained by the increased competition and negative interest rates dynamics.
Net fee and commission income increased by 15.1% compared with FY 2009 and amounted to RUB 1.7 billion. Net fee and commission income for 4Q 2010 amounted to RUB 534.6 million (+28.2% compared with 3Q 2010; +24.2% compared with 4Q 2009). The growth mainly comes from plastic cards operations (+22.1%); in 2010, they grew to RUB 489.9 million. The bulk of fee and commission income (39.6%) comes from settlement transactions; in 2010 they grew by 9.4% to RUB 793.9 million.
Net trading income. In FY 2010 an aggregate result from financial markets operations amounted to RUB 903.1 million (-67.9% compared with FY 2009). The result is attributed to the gains from operations with foreign currencies in the amount of RUB 667.8 million and gains from operations with securities in the amount of RUB 235.3 million.
Income before provisions and taxes decreased by 2.9% compared with FY 2009 and amounted to RUB 14.7 billion for FY 2010 mainly due to the decrease in Net trading income. The Bank’s Cost-to-Income Ratio for FY 2010 came closer to the target level of 30-35% and amounted to 30.0% (24.6% for FY 2009). Bank’s operational expenses increased to RUB 4.5 billion (+17.9% compared with FY 2009).
Net income for FY 2010 amounted to RUB 4.1 billion (+542.6% compared with FY 2009) which is a record yearly income for the Bank. Net income for 4Q 2010 reached RUB 1.8 billion (+54.7% compared with 3Q 2010; +394.8% compared with 4Q 2009) being the record as well. The Bank’s return on equity (ROAE) for FY 2010 improved to 15.3% from 2.9% for FY 2009 which is close to the target level of over 20%. ROAE for 4Q 2010 is well above the target at 26.0%.
During FY 2010 the Bank’s assets increased to RUB 272.6 billion (+15.7% compared with January 1, 2010; +10.2% compared with October 1, 2010).
Liabilities. Customer accounts amounted to RUB 202.2 billion (+11.6% compared with January 1, 2010;
+12.9% compared with October 1, 2010). As at January 1, 2011, 64.2% of customer accounts belonged to corporate
customers and 35.8% - to individuals. During FY 2010, the volume of retail customer accounts increased by 19.3%; the
volume of corporate customer accounts increased by 7.8%.
In 2010, the Bank resumed its capital markets operations. Among the transactions are three local bond issues with an aggregate amount of RUB 13 billion; the USD 55 million syndicated loan; the USD 65 million loan from the EBRD. As at January 1, 2011, the share of wholesale funding in liabilities amounted to 10.8% (5.2% as at January 1, 2010).
Equity and capital. As at January 1, 2011, the shareholders equity increased by 13.0% to RUB 28.6 billion compared with January 1, 2010 due to the retained earnings. The Bank’s total capital increased to RUB 35.9 billion (+8.0% compared with January 1, 2010; +4.0% compared with October 1, 2010). As at January 1, 2012, the Bank’s Tier 1 and total capital adequacy ratios were 9.6% and 13.0% respectively.
As at January 1, 2011, Loan portfolio before provisions amounted to RUB 202.3 billion (+16.2% compared to January 1, 2010; +2.9% compared with October 1, 2010). Corporate loans constituted 93.0% of the loan book and amounted to RUB 188.2 billion, during FY 2010 their volume increased by 18.0%, during 4Q 2010 - by 3.2%. Loans to retail customers amounted to RUB 14.1 billion (-4.0% compared with January 1, 2010; -1.0% compared with October 1, 2010).
Loan portfolio quality. As at January 1, 2011, the share of overdue loans in the Bank’s portfolio amounted to 5.1% of the total volume of loans (7.4% as at January 1, 2010). The share of the corporate overdue loans amounted to 4.8% of the total corporate loans (7.1% as at January 1, 2010); the share of the retail overdue loans amounted to 8.8% of the total retail loans (10.1% as at January 1, 2010).
As at January 1, 2011, impaired not past due loans constituted 5.9% of the total volume of loans (7.1% as at January 1, 2010). The rate of provisions for loan impairment decreased to 9.6% compared with the peak of 11.1% as at July 1, 2010. Provision charge steadily declines: in FY 2010, it decreased by 57.3% to RUB 4.5 billion compared with RUB 10.5 billion for FY 2009. Additional expenses related to loans impairment in the amount of RUB 525 million are reflected as the loss at loans granted on below market rates.
FY 2010 IFRS Financial Statements are available on the Bank’s website.