28 July 2011
Bank Vozrozhdenie reported H1 2011 results under Russian Accounting Standards.
Net profit for 6M 2011 increase by 2.5 times YoY and amounted to Rub 700.6 mln.
Net interest income of the bank for the reporting period grew by 13.5% YoY driven by cost of funding reduction and cease of interest expenses. Net commission income for 6M 2011 increased by 19.2% YoY and comprised 39% of total operating income. Thus, operating income before provisions climbed by 16.0% YoY and totaled Rub 5,864 mln. In 2011 the bank demonstrated net interest margin on average assets growth from 3.5% for Q1 2011 to 4.2% in Q2 2011.
“In the second quarter we enjoyed healthy growth of operating income and recovery of net interest margin. Despite the environment of low interest rates we managed to increase interest income and further reduced cost of funding. Thus, amid revived credit demand structure of the bank’s loan growth fully complies with our expectations — while in the first quarter we significantly built up corporate loan portfolio, in Q2 2011 we focused on more profitable retail clients, primarily in mortgage segment”, — commented Dmitry Orlov, Chairman of the Management board.
The bank’s assets surged by 18.8% YoY and totaled Rub 174.6 bln. The growth was mostly driven by loan portfolio. Corporate lending before provisions increased by 27.7% YoY (+13.7% Ytd) and amounted to RUB 110 bln, while retail loan portfolio grew by 40.0% YoY (+20.9% Ytd) to Rub 20 bln. Share of loan portfolio in the bank’s assets climbed to 69%.
Individual deposits, the main source of funding for the bank, grew by 11.9% as compared to July 01, 2010 to Rub 83.9. Total customer accounts increased by 14.6% YoY to Rub 137.4 bln. Thus loan to deposit ratio improved to 94.6% as compared to the results of the same reporting period of the previous year.
The bank continued to charge adequate provisions for loan losses and other assets in accordance with CBR regulations. Charges to provisions amounted to Rub 533 mln in the second quarter and while overall provisions for loan losses totaled a bit more than Rub 12.7 bln or 9.7% of the loan book as of the July 1, 2011.
Bank Vozrozhdenie provides services for 1.6 million individuals and more than 60,000 corporate clients. Distribution network accounts for 171 office and 765 ATMs in 21 regions of Russia.