CREDIT BANK OF MOSCOW announces its 2014 annual IFRS financials


Key results

  • Net income amounted to RUB 5,569 mln ($99.0 mln).
  • Net interest margin grew to 5.8% vs 5.2% in 2013
  • Return on equity and return on assets were 10.1% and 1.1% respectively.
  • Assets expanded by 28.8% to RUB 584,839 mln ($10,395.6 mln).
  • Gross loan portfolio before provisions rose 24.0% to RUB 394,191 mln ($7,006.8 mln).
  • The share of non-performing loans (90+ days) in the gross loan portfolio grew to 2.3% in 2014 compared to 1.3% in 2013.
  • Loan loss provisions grew from 2.8% to 4.1%.
  • Customer accounts and deposits rose 21.8% to RUB 334,852 mln ($5,952.0 mln).
  • Equity increased by 18.4% to RUB 59,987 mln ($1,066.3 mln).
  • Basel III capital increased by 27.1% to RUB 90,339 mln ($1,605.8 mln), with the capital adequacy ratio of 15.8%, and Tier I ratio of 10.5%.
  • Cost-to-income ratio remained sustainably low at 33.7%.

Key financial highlights

Balance sheet 2014, RUB mln 2013, RUB mln change, %
Assets 584,839 454,202 +28.8
Liabilities 524,852 403,544 +30.1
Equity 59,987 50,658 +18.4
Capital (Basel III) 90,339 71,064 +27.1
Gross loan portfolio before provisions 394,191 317,860 +24.0

Key financial ratios, % 2014 2013
Basel capital adequacy ratio (CAR)15.814.8
90+ NPL ratio (before provisions)2.31.3
Loan-loss provisions / Gross loans4.12.8
Net loans / deposits112.9112.4

Income statement 2014, RUB mln 2013, RUB mln change, %

Net interest income (before provisions) 25,808 17,380 +48,5
Fee and commission income 9,102 7,205 +26,3
Net income 5,569 8,880 -37,3

Key financial ratios, % 2014 2013
Net interest margin (NIM) 5.8 5.2
Cost-to-income (CTI) 33.7 31.2
Return on capital (ROAE) 10.1 20.1
Return on assets (ROAA) 1.1 2.4

Total assets grew by 28.8% to RUB 584.8 bln in 2014, of which cash and cash equivalents represented 20.3% as a result of the Bank’s conservative liquidity management policy amid the market turbulence in late 2014

Gross loan portfolio (before provisions) stands at RUB 394.2 bln, 24.0% more than at 2013YE. The corporate loan book grew by 20.9% to RUB 265.9 bln, and the retail loan book by 31.1% to RUB 128.3 bln. The share of retail loans in the gross loan portfolio reached 32.5% compared to 30.8% as of 2013YE. Owing to the difficult macroeconomic situation, non-performing loans (NPL 90+) increased to 2.3%, whereas loan loss provisions amounted to 4.1% of the Bank’s gross portfolio.

Customer accounts and deposits increased by 21.8% in 2014 to RUB 334.9 bln accounting for 63.8% of total liabilities. Corporate deposits grew by 22.1% to RUB 171.5 bln in 2014. Retail deposits increased by 21.5% to RUB 163.4 bln in the reporting period. The ratio of net loans to deposits remained at 112.9%, the same level as in 2013.

In December 2014, the Bank’s total capital was increased by two subordinated loans totalling RUB 10 bln. A RUB 5 bln subordinated loan borrowed from the majority shareholder was subsequently converted into shareholders’ equity in February 2015 and thus was factored into 2014YE tier 1 capital calculations.

The second 10.5-year RUB 5 bln subordinated loan was raised through the placement by CBOM Finance p.l.c., an Irish special purpose vehicle, of RUB 5 bln 16.5% subordinated Eurobond callable in 5.5 years.

Capital adequacy ratio calculated in accordance with Basel III grew from 14.8% to 15.8%. The Bank’s total capital according to Basel III standards increased by 27.1% to RUB 90.3 bln. Tier I capital ratio rose in the reporting period from 10.2% to 10.5%.

Net income for 2014 fell to RUB 5.6 bln, a 37.3% drop compared to 2013. This decline was mainly due to the increase in loan loss provisions to RUB 11.6 bln resulting from the Bank’s conservative approach to loan loss provisioning in the prevailing market conditions, and to the negative revaluation of the securities portfolio and losses from foreign exchange operations. On the other hand, the Bank demonstrated growth of net interest income to RUB 25.8 bln and of net interest margin to 5.8% on the back of a 24.0% gross loan portfolio expansion and effective assets and liabilities management actions such as timely adjustment of loan pricing, firstly for corporate borrowers, following the repeated increases in the Bank of Russia’s key rate during the year. As a result, the annual net interest income accounted for 91% of the operating income before provisions.

Fee and commission income increased by 26.3% compared to 2013 and reached RUB 9.1 bln. The key growth drivers included plastic card fees that soared by 2.4 times to RUB 1.6 bln and the documentary credit fees that rose by 48.7% to RUB1.7 bln.

Total operating income (before provisions) in 2014 grew by 15.0% to RUB 28.2 bln. Operating expense grew by 21.5% to RUB 9.5 bln on the back of the Bank's business expansion with the increasing number of the Bank’s offices and employees. In particular, staff costs grew by 20.8% to RUB 4.3 bln, and administrative costs, including rental and advertising costs, by 33.6% to RUB 3.6 bln. Operational efficiency remained at a high level with the cost-to-income (CTI) ratio being 33.7%.

Capital markets activity

In March 2014, the Bank raised a USD 500 mln syndicated loan facility split into two tranches due in 12 and 18 months. This loan facility is notable for being the Bank’s all-time largest deal in the syndicated loan market and one of its lower priced and longer-termed transactions of that kind.

In June 2014, the Bank placed its RUB 3.7 bln debut class "A" mortgage-backed bonds due in 25 years.

In July 2014, the Bank placed two 5-year domestic exchange-traded bond issues series BO-10 and BO-11 with a face value of RUB 5 bln each. The pre-buyback semi-annual coupon rates were fixed at 10.5% p.a. for series BO-10 and 10.9% p.a. for series BO-11.

In December 2014, the Bank placed RUB 10 bln and RUB 2 bln additional issues of its exchange-traded bonds series BO-11 and BO-07, respectively. The pre-buyback semi-annual coupon rates for the additional issues were fixed at the same level as the original issues, i.e. 10.9% and 9.1% per annum, respectively. The subsequent coupon rates will be set later on.

Infrastructure development

The Bank’s branch network comprising 58 offices and 31 operational cash desks in Moscow and the Moscow Region as of 31 December 2014 was recognised as one of the most efficient ones in the Russian banking sector in 2014 by Renaissance Credit. As at the reporting date, the Bank had 841 ATMs and more than 5,600 payment terminals.


· CREDIT BANK OF MOSCOW's Internet banking system "MKB Online" was awarded the 2nd place in Internet Banking Rank 2014, a survey of remote banking service systems made by the research agency Markswebb Rank & Report.

· CREDIT BANK OF MOSCOW was among the top five Russian financial institutions by the quality of reporting and the level of corporate governance disclosure according to a survey published in April 2014 by the Russian Integrated Reporting (IR) regional network.

· CREDIT BANK OF MOSCOW was the 2nd in a ranking of financial institutions perceived by retail customers as matching their image of the "ideal bank" according to a survey issued by RBC.research agency in June 2014.

· In July 2014 CREDIT BANK OF MOSCOW was named the Best Bank in Russia for achievements in the financial sector at Euromoney’s Awards for Excellence 2014 annual ceremony.

· CREDIT BANK OF MOSCOW was named the “Bank of the Year in Russia” in 2014 at the annual ceremony “Bank of the Year Awards 2014” held by The Banker (Financial Times group) in London.

· In March 2015 banking market experts acknowledged CREDIT BANK OF MOSCOW's corporate governance system as the best in Russia giving it the highest award in RusRating's special nomination "Corporate Governance Quality".