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CREDIT BANK OF MOSCOW demonstrates strong IFRS results for 1H2017

21.08.2017

Key results

  • Net income increased by 97.5% yoy to RUB 10.0 bln ($169.4 mln).
  • Return on equity and return on assets were 18.5% and 1.3% respectively.
  • Net interest margin was 2.9%.
  • Net interest income as percentage of average RWA was 4.3% .
  • Assets amounted to RUB 1.6 trln ($26.4 bln).
  • Gross loan portfolio rose 14.1% ytd to RUB 760.8 bln ($12.9 bln).
  • Ratio of NPLs (90+ days) to gross loan portfolio reduced from 2.3% as at end-2016 to 1.9%.
  • Cost of risk (COR) decreased from 4.6% as at end-2016 to 2.1%.
  • Customer deposits grew by 16.6% in 1H2017 to RUB 804.1 bln ($13.6 bln).
  • Equity increased by 49.3% to RUB 154.4 bln ($2.6 bln).
  • Basel III capital grew by 46.2% to RUB 233.6 bln ($3.4 bln), with the capital adequacy ratio of 21.8%, and Tier I ratio of 14.3%.
  • Cost-to-income ratio was 29.2%.

Balance sheet 1H2017, RUB bln 2016, RUB bln change, %
Assets 1 588,0 1 568,0 +1,3%
Liabilities 1 434,6 1 464,6 -2,0%
Equity 154,4 103,4 +49,3%
Capital (Basel III) 233,6 159,8 +46,2%
Gross loan portfolio 760,8 666,7 +14,1%
Key financial ratios, %
Basel capital adequacy ratio (CAR) 21,8% 14,7%
90+ NPL ratio (before provisions) 1,9% 2,3%
Cost of risk (COR) 2,1% 4,6%
Provisioning ratio 5,6% 6,0%
Net loans / deposits 89,3% 90,9%

Income statement 6M 2017, RUB bln 6M 2016, RUB bln change, %
Net interest income (before provisions) 20,7 20,5 +1,2%
Fee and commission income 8,0 6,3 +27,0%
Net income 10,0 5,1 +97,5%
Key financial ratios, %
Net interest margin (NIM) 2,9% 3,5%
Net interest income as percentage of average RWA (NII/ARWA) 4,3% 4,5%
Cost-to-income ratio (CTI) 29,2% 22,5%
Return on equity (ROAE) 18,5% 10,7%
Return on assets (ROAA) 1,3% 0,8%

Key financial indicators

The net income for 1H2017 increased by almost 2 times yoy to RUB 10.0 bln. This was driven by fee income growth, which is a priority for the Bank, and improving quality of its loan portfolio, which resulted in lower provisioning.

The net interest margin for 1H2017 was 2.9% as highly liquid assets represented a significant percentage of the Bank’s balance sheet. The net interest income as percentage of average RWA was 4.3%. The Bank’s interest margin indicators are in line with market trends.

The operating income (before provisions) for 1H2017 decreased by 1.3% to RUB 28.7 bln. The operating expense increased by 28.1% to RUB 8.3 bln as the Bank expands its business. The Bank’s operational efficiency remained at a high level, as witnessed by the traditionally low cost-to-income (CTI) ratio which was 29.2% in the reporting period.

The gross loan portfolio grew by 14.1% ytd to RUB 760.8 bln, owing to the corporate loan portfolio expanding by 17.3% to RUB 663.9 bln mainly due to loans issued to high-quality large caps. The retail loan portfolio shrank by moderate 3.6% to RUB 96.9 bln in 1H2017, which reflects the Bank’s cautious approach to retail lending. The share of corporate loans in the total loan portfolio grew from 84.9% as at end-2016 to 87.3%. The ratio of non-performing loans (NPL90+) decreased by 0.4 pp to 1.9%. The improving loan portfolio quality was also evidenced by a reduction in the cost of risk to 2.1% in the reporting period from 4.6% as at end-2016. The NPL90+ coverage ratio increased from 263.3% as at end-2016 to 302.9% as at 1H2017.

The total assets amounted to RUB 1,588.0 bln as at 1H2017.

The customer deposits increased by 16.6% in 1H2017 to RUB 804.1 bln, which is 56.1% of the Bank’s total liabilities. The ratio of loans after provisions to deposits was 89.3%.

The Basel III capital adequacy ratio grew from 14.7% as at end-2016 to 21.8% in 1H2017. The tier I capital ratio rose from 9.4% to 14.3%. The Bank’s total capital according to the Basel III standards increased by 46.2% in 1H2017 to RUB 233.6 bln, mainly due to USD 600 mln and USD 700 mln subordinated Eurobonds placed in April and May which were factored in tier 2 and tier 1 capital calculations, respectively.

Infrastructure development

As of 30 June 2017, CREDIT BANK OF MOSCOW had 96 offices, 24 stand-alone cash desks, 1,063 ATMs and 5,945 payment terminals (31 December 2016: 91, 24, 1,026 and 5,725 respectively).