CREDIT BANK OF MOSCOW reports its 2015 annual IFRS results
29.03.2016
Key results
- Net income amounted to RUB 1.5 bln ($20.7 mln).
- Net interest margin reached 3.9%.
- Return on equity and return on assets were 2.1% and 0.2% respectively.
- Assets expanded by 106.6% to RUB 1,208.2 bln ($16,577.3 mln).
- Gross loan portfolio rose 59.8% to RUB 629.9 bln ($8,643.2 mln).
- Ratio of NPLs (90+ days) to gross loan portfolio amounted to 5.1%.
- Loan impairment allowance ratio grew from 4.1% in 2014 to 5.9% in 2015.
- Customer accounts and deposits rose by 2.7 times to RUB 898.7 bln ($12,330.7 mln).
- Equity increased by 53.9% to RUB 92.3 bln ($1,267.9 mln).
- Basel III capital increased by 79.9% to RUB 162.6 bln ($2,230.3 mln), with the capital adequacy ratio of 16.5%, and Tier I ratio of 9.2%.
- Cost-to-income ratio dropped to 26.4%.
Key financial highlights
| Balance sheet | 2015, RUB bln | 2014, RUB bln | change, % |
| Assets | 1,208.2 | 584.8 | +106.6 |
| Liabilities | 1,115.9 | 524.9 | +112.6 |
| Equity | 92.3 | 60.0 | +53.9 |
| Capital (Basel III) | 162.6 | 90.3 | +79.9 |
| Gross loan portfolio before provisions | 629.9 | 394.2 | +59.8 |
| Key financial ratios, % | 2015 | 2014 |
| Basel capital adequacy ratio (CAR) | 16.5 | 15.8 |
| 90+ NPL ratio (before provisions) | 5.1 | 2.3 |
| Loan-loss provisions / Gross loans | 5.9 | 4.1 |
| Net loans / deposits | 66.0 | 112.9 |
| Income statement | 2015, RUB bln | 2014, RUB bln | change, % |
| Net interest income (before provisions) | 29.3 | 25.9 | +13.2 |
| Fee and commission income | 9.4 | 9.0 | +3.8 |
| Net income | 1.5 | 5.6 | -72.9 |
| Key financial ratios, % | 2015 | 2014 |
| Net interest margin (NIM) | 3.9 | 5.8 |
| Cost-to-income (CTI) | 26.4 | 33.9 |
| Return on capital (ROAE) | 2.1 | 10.1 |
| Return on assets (ROAA) | 0.2 | 1.1 |
Net income for 2015 was RUB 1.5 bln. It declined due to provisions having grown to RUB 26.0 bln as a result of the Bank’s conservative approach to provisioning and the currently difficult operating environment. However, the Bank demonstrated growth of net interest income by 13.2% to RUB 29.3 bln, mostly due to special attention that is paid to interest rate risk management under the current macroeconomic conditions. Net interest margin for the year was 3.9%. Fee and commission income increased by 3.8% compared to 2014 and reached RUB 9.4 bln. That growth was notably driven by other cash operations fees that soared by 2.7 times to RUB 0.9 bln mainly due to growing gains from the payment terminal network. Cash handling fees grew by 23.9% to RUB 1.5 bln, partly because of the acquisition of INKAKHRAN in November 2015.
Operating income (before provisions) grew by 38.7% to RUB 39.2 bln. Operating expense increased by 16.8% to RUB 11.2 bln with provisions for impairment of credit related commitments rising to RUB 0.9 bln. The Bank's operational efficiency improved, as evidenced by the cost-to-income (CTI) ratio reducing to 26.4%.
Total assets rose by 106.6% to RUB 1,208.2 bln. The main balance sheet item, gross loan portfolio, increased by 59.8% to RUB 629.9 bln in 2015, owing to the corporate loan portfolio expanding by 91.9% to RUB 510.2 bln mainly due to loans made to high quality corporate customers. The retail loan portfolio shrank by 6.7% to RUB 119.7 bln as requirements to customers became stricter and demand for retail loans generally weakened. The share of corporate loans in the total loan portfolio grew from 67.5% as at 2014YE to 81.0% as at 2015YE. Given the difficult macroeconomic situation, the ratio of non-performing loans (NPL 90+) increased by 2.8 pp to 5.1%, with the 4th quarter's contribution being just 0.2 pp. That growth was mainly due to the arrears of several large borrowers ageing beyond 90 days, while the loan portfolio quality generally did not tend to deteriorate throughout the year. The loan impairment allowance grew to RUB 36.9 bln. The NPL90+ coverage ratio remained at a good level of 113.7% as at 2015YE.
Customer accounts and deposits reached 80.5% of the Bank’s total liabilities having increased by 2.7 times to RUB 898.7 bln. The deposit base expanded mainly due to a 4.1 times growth of corporate deposits that reached RUB 697.8 bln or 77.6% of total deposits. Retail deposits rose in the reporting period at a more moderate 23.0% up to RUB 200.9 bln. The ratio of net loans to deposits dropped to 66.0% as at the end of 2015.
Capital adequacy ratio calculated in accordance with Basel III grew from 15.8% as at 2014YE to 16.5% as at 2015YE. The Tier I capital ratio reduced from 10.5% to 9.2%. The Bank's total capital according to Basel III standards increased by 79.9% to RUB 162.6 bln. This resulted from the closing of the Bank's IPO on the Moscow Exchange in June 2015 which yielded RUB 13.2 bln, and a RUB 16.5 bln SPO on the Moscow Exchange in December 2015. Furthermore, its additional capital was strengthened in 2Q2015 with a RUB 20.2 bln subordinated loan provided by the Deposit Insurance Agency in the form of Russian federal bonds (OFZ) under the Russian banking system recapitalisation programme. The additional capital was also increased by a USD 300 mln (RUB 21.9 bln) subordinated deposit taken in December 2015.
Infrastructure development
At the end of 2015, CREDIT BANK OF MOSCOW had 62 offices, 21 stand-alone cash desks, 927 ATMs and 5,443 payment terminals (as of 31 December 2014, these figures were 58, 31, 841 and 5,683 respectively).
Awards in 2015
- CREDIT BANK OF MOSCOW was named the "Bank of the Year in Russia" for the second year in a row at the annual ceremony "Bank of the Year Awards 2015" held by the Banker (Financial Times group) in London.
- In September 2015, Global Banking and Finance Review, one of the leading international financial portals, pronounced CREDIT BANK OF MOSCOW's IPO the best in Russia.
- 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".
- A survey of retail internet-banking systems' functionality conducted by "Expert RA" rating agency, put CBM's "MKB Online" at number three in terms of information and financial security in July 2015 (in 2014 it was listed as number 7 in the same category).
- CREDIT BANK OF MOSCOW’s annual report was recognised as the best in financial sector at the XVIII Annual Contest of Annual Reports organised by the Moscow Exchange and RCB media group in October 2015.