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EquityStory.RS, LLC-News: Vozrozhdenie Bank / Key word(s): 9-month
figures/Interim Report
Vozrozhdenie Bank: earned Rub 2.7 billion of net profit under IFRS in 9M
2017
2017-11-29 / 08:58
The issuer is solely responsible for the content of this announcement.
*- *Net profit in 9M 2017 amounted to Rub 2.7 billion compared to Rub 1.2
billion for the same period of the previous year;
- Cost-to-income ratio decreased to 49% improving by 4 pps compared to 9M
2016;
- ROE for 9M 2017 was 15% increasing by 7 pps YoY;
- Gross loan portfolio grew by 2% YtD to Rub 194 billion;
- Assets added 3% YtD to Rub 245 billion;
- Net interest margin for 9M 2017 reached 5% improving by 72 bps YoY.
"During the nine months of 2017 the bank substantially improved the asset
quality, normalised provisioning and optimised internal processes that
supported the bank's profitability. Excellent results of the last several
quarters are consequential on the shareholders' trust in the built business
model. It was founded on community-bank strategy and historically strong
client relations. Today the key priority in the bank's development is
implementing digital solutions allowing to bring the bank to a more advanced
level," commented *Interim Chairman of the Management Board Mark
Nakhmanovich*.
Positive dynamics in interest income and fees & commission income supported
*pre-provision* *profit *for 9M 2017 whichamounted to Rub 5.8 billion, 28%
higher YoY.
*Net profit *for 9M 2017 equalled to Rub 2.7 billion, increasing more than
twofold compared to the result of the previous year.
*Net interest income (NII)* reached Rub 9.1 billion in the reporting period.
The bank improved the result by 25% YoY through efficient management of
interest rates on retail deposits and optimised funding structure. Interest
income in Q3 amounted to Rub 6.2 billion remaining at Q2 level.
The bank maintains the gradual cost of funds decrease (-67 bps QoQ to 5.4%;
-130 bps YoY to 5.9%). High share of interest-earning assets (88%) and
steady ROA of 12.2% within the whole reporting period allowed the bank to
expand *net interest spread* by 21 bps YoY to 6.4% and by 56 bps to 6.8% for
Q3 2017. Thus, *net interest margin (NIM) *continued growing and reached 5%
for 9M 2017 exceeding both figure for 9M 2016 (4.3%) and annual target value
of 4.5%.
*Net fees &* *commissions* for 9M 2017 grew by 13% to Rub 3.5 billion
compared to the same period of the previous year driven by an increase in
net fee income on settlement and bank card transactions. Share of net fees &
commissions in pre-provision operating income increased by 63 bps YoY and
amounted to 27%.
*Operating expenses* for 9M 2017 totalled Rub 6.3 billion. Control over
expenses and internal processes optimisation allowed the bank to hold
expenses at the level of 9M 2016 and maintain business efficiency indices.
*Cost-to-income ratio *for 9M 2017 was 49% reducing by 4 pps YoY. In
quarterly terms the ratio reduced by 4 pps to 46%.
In the reporting period *ROE* was 15% twice as much of that of the previous
year. Operating profit before provisions and taxation to equity ratio was
35%. *ROA *also doubled to 1.5%.
*Assets* remained flat QoQ showing 3% growth since the beginning of the year
and totalled Rub 245 billion. The share of liquid assets increased by 3 pps
to comfortable 20%. *Loan-to-deposit ratio *was 98% remaining in the target
range.
During 9M 2017 *gross loans* added 2% to Rub 194 billion. *Loans to legal
entities* remained on a par with the beginning of the year and amounted to
Rub 127 billion, 5% lower QoQ due to early repayments of several corporate
loans.
During all the nine months mortgage loans steadily were growing adding 8%
YtD to Rub 49 billion and remained the key growth driver of *retail loan
portfolio *(+6% YtD to Rub 68 billion). Consumer loans also grew by 1% to
Rub 17 billion. At the same time, credit card and car loans decreased to Rub
2 billion and Rub 0.1 billion, respectively. The share of retail loans
increased by 1 pps YtD to 35%.
The share of *non-performing loans (NPLs 90+)* declined by 1 pps YtD and
accounted for 6.6% as of the reporting date.Coverage of NPL 90+ over the
same period improved by 16 pps to 123%. In total, loans overdue by more than
90 days were Rub 13 billion (-13% YtD and -0.4 QoQ).
Corporate NPLs 90+ were Rub 7.6 billion as of reporting date with 8% share
in portfolio compared to 9% share as of the beginning of the year. NPLs 90+
in SME segment stood at Rub 3 billion with 10% share declining by 3 pps YtD.
Retail NPLs 90+ amounted to Rub 2 billion with 3% share showing
significantly better figure than banking sector average of 8%*.
In Q3 2017 *cost of risk *dropped below 1% and was 0.9% compared to 2.3% in
Q1 2017 and Q2 2017 resulting in 1.8% for 9M 2017. Provisioning was Rub 2.7
billion for 9M 2017, contracting by 19% YoY.
The bank's *liabilities* increased by 2% YtD and totalled Rub 219 billion
(-1% QoQ). Within their structure, raised *client funds* diminished 2% QoQ
to Rub 197 billion primarily due to the reduction of expensive corporate
term deposits share in the funding structure.
*Retail funds* remained stable in the reporting period and amounted to Rub
141 billion. During the reporting nine months deposit portfolio continued
positive trend (+5% YtD against +2% across the banking sector*; +1% QoQ
against -1% across the banking sector*) and amounted to Rub 127 billion by
the end of the reporting period. The share of retail funds in total funds
attracted from clients was 72%, +3 pps YtD.
Balances on companies' current accounts were Rub 39 billion, adding 10% YtD.
At the same time term deposits of legal entities, which are more expensive
for the bank, declined to Rub 17 billion (-38% YtD).
Due to earnings capitalisation in amount of Rub 1.6 billion the bank's *IFRS
equity* increased by 10% YtD and totalled to Rub 26 billion as of the end of
the reporting period.
*Total capital* calculated in accordance with the requirements of Basel III
amounted to Rub 33 billion as of September 30, 2017 (+6% YtD). *Capital
adequacy and Tier I capital adequacy ratios* increased to 16.2% and 12.5%
YtD respectively.
*Total capital adequacy ratio (N1.0) and common equity Tier I capital
adequacy ratio (N1.1)* calculated in accordance with the requirements of the
Bank of Russia remained at the level of the beginning of the year and were
12.1% and 8.1% (minimum acceptable levels set by the Bank of Russia
increased for CAR support buffer are 9.25% and 5.75%, respectively).
_* According to the data provided by the Bank of Russia._
2017-11-29 Dissemination of a Corporate News, transmitted by EquityStory.RS,
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Language: English
Company: Vozrozhdenie Bank
7/4 Luchnikov Pereulok, bldg. 1
101990 Moscow
Russia
Phone: +7 (495) 620-90-71
Fax: +7 (495) 620-19-99
E-mail: investor@voz.ru
Internet: www.vbank.ru
ISIN: RU0009084214
End of News EquityStory.RS, LLC News Service
633641 2017-11-29
(END) Dow Jones Newswires
November 29, 2017 02:58 ET (07:58 GMT)
