CREDIT BANK OF MOSCOW announces its IFRS results for 1Q2016


Key results

  • Net income amounted to RUB 1.7 bln ($24.5 mln).
  • Net interest margin narrowed from 3.8% for 3M2015 to 3.1% for 3M2016.
  • Return on equity and return on assets increased to 7.1% and 0.5% respectively (3M2015: 1.9% and 0.2%; FY2015: 2.1% and 0.2%).
  • Assets grew by 12.9% y-t-d to RUB 1,364.0 bln ($20,175.3 mln).
  • Gross loan portfolio rose 0.6% to RUB 633.7 bln ($9,373.7 mln).
  • Ratio of NPLs (90+ days) to gross loan portfolio amounted to 5.4%.
  • Loan loss provisions grew from 5.9% to 6.5% of gross loan portfolio.
  • Customer deposits increased by 0.8% to RUB 906.0 bln ($13,401.1 bln).
  • Equity increased by 2.5% to RUB 94.7 bln ($1,400.6 mln).
  • Basel III capital amounted to RUB 160.9 bln ($2,380.3 mln), with the capital adequacy ratio of 16.0% and Tier I capital ratio of 9.2%.
  • Cost-to-income ratio dropped to the all-time low 24.5%.

Key financial highlights

Balance sheet 1Q 2016, RUB bln 2015, RUB bln change, %
Assets 1,364.0 1,208.2 12.9
Liabilities 1,269.3 1,115.9 13.8
Equity 94,7 92.3 2.5
Capital (Basel III) 160.9 162.6 (1.0)
Gross loan portfolio before provisions 633.7 629.9 0.6

Key financial ratios, % 1Q 2016 2015
Basel capital adequacy ratio (CAR)16.016.5
90+ NPL ratio (before provisions)5.45.1
Loan-loss provisions / Gross loans6.55.9
Net loans / deposits65.466.0

Income statement 3M 2016, RUB bln 3M 2015, RUB bln change, %

Net interest income (before provisions) 9.1 5.0 83.9
Fee and commission income 3.0 1.7 77.2
Net income 1.7 0.3 473.5

Key financial ratios, % 3M 2016 3M 2015
Net interest margin (NIM) 3.1 3.8
Cost-to-income (CTI) 24.5 29.3
Return on capital (ROAE) 7.1 1.9
Return on assets (ROAA) 0.5 0.2

Net income for the 3 months of 2016 was RUB 1.7 bln, compared to materially lower RUB 0.3 bln in 1Q2015. The growth of net income was driven by net interest income soaring by 83.9% to RUB 9.1 bln, and net fee and commission income by 87.9% to RUB 2.5 bln on the back of gradually stabilising business activity in the current year and a significant growth of the Bank's business volumes in the second half of 2015. The fee and commission income were mainly driven by cash collection fees which increased by more than 2 times y-o-y to RUB 0.6 bln as a result of the Bank’s strategic acquisition in November 2015 of one of its cash collection competitors NCO INKAKHRAN.

Operating income (before provisions) grew by 73.7% to RUB 12.4 bln y-o-y. Operating expense increased by 43.5% to RUB 3.1 bln due to the growth of staff costs to RUB 1.9 bln and some administrative expenses mainly caused by the consolidation of NCO INKAKHRAN. However, the Bank's operational efficiency continued to improve as shown by its CTI ratio reducing to the all-time low 24.5%.

Gross loan portfolio totalled RUB 633.7 bln as at 1Q2016 staying basically at the same level as at end-2015 (+0.6%). The corporate loan portfolio expanded by 1.2% to RUB 516.3 bln, while the retail loan portfolio shrank by 1.9% to RUB 117.4 bln as the Bank tightened its criteria for retail borrowers pursuant to its revised risk management policy. The ratio of non-performing loans (NPL90+) in the total loan portfolio increased slightly from 5.1% to 5.4%. Loan loss provisions grew from 5.9% of the Bank's gross portfolio as at end-2015 to 6.5% as at the end of the reporting quarter while the cost of risk decreased from 5.4% to 4.5% and the NPL90+ coverage ratio increased from 113.7% to 121.8%. The Bank's conservative provisioning policy is intended to mitigate the impact of potential market fluctuations on the future profitability amid the yet-to-be-fully-stabilised macroeconomic environment.

Customer deposits demonstrated stability in 1Q2016 and amounted to RUB 906.0 bln or 71.4% of the Bank's total liabilities. The ratio of loans after provisions to deposits remained relatively low at 65.4% in 1Q2016.

Capital adequacy ratio calculated in accordance with Basel III dropped from 16.5% as at end-2015 to 16.0% as at the first quarter of 2016 due to rouble strengthening and, subsequently, devaluation of FX-nominated subordinated loans. Tier I capital ratio remained at the same level of 9.2% as it was at end-2015.

Infrastructure development

As of 31 March 2016, CREDIT BANK OF MOSCOW had 64 offices, 21 stand-alone cash desks, 946 ATMs and 5,400 payment terminals (31 March 2015: 62, 21, 927 and 5,443 respectively).