OREANDA-NEWS. On September 22, 2008 Alfa-Banking Group, which includes Alfa-Bank and its subsidiaries, reported financial results for the first half of 2008, reported the press-centre of Alfa-Bank.

During the first six months of 2008 Alfa-Banking Group demonstrated significant growth of its total assets to USD 28.9 billion, up 27.3% from USD 22.7 billion at the end of 2007. Net profit after tax grew an unprecedented 129.5% to USD 265.3 million, up from USD 115.6 at June 30, 2007, driven largely by growth in core banking revenues combined with effective cost control.

Net interest income increased by 69.5% to USD 659.4 million from USD 389.0 as at June 30, 2007, while net commission income grew by 70.0% to USD 186.2 million from USD 109.5 as at June 30, 2007. At the same time, Alfa-Banking Group’s investment in technology and focus on cost control have been the main drivers of a significant reduction in the cost-to-income ratio to 49.7%, compared to 55.5% at the end of 2007.

The Group’s gross loan portfolio grew to USD 20.2 billion at June 30, 2008, a 31.2% increase compared to USD 15.4 billion at December 31, 2007. The corporate loan portfolio rose by 31.1% to USD 17.7 billion, while loans to retail clients increased by 31.6% to USD 2.5 billion at June 30, 2008.

Despite the difficulties on the market, Alfa-Banking Group raised USD 400 million in June 2008 under its Euro Medium Term Note Programme , while in July 2008 Alfa-Banking Group closed a syndicated loan in the amount of USD 315 million. In July 2008, Alfa-Banking Group repaid a syndicated loan in the amount of USD 452.1 million and Medium Term Notes of USD 250 million.

Currently Alfa-Banking Group has a total of USD 435.7 million syndicated loans due in November and December 2008 and other regular repayments under its Diversified Payments Rights and other Programmes totalling USD 138.6 million due by year-end. Alfa-Banking Group aims to constantly maintain a significant cash buffer, and repayment of these maturing liabilities is expected to be financed from organic cash flows.

In June 2008 Alfa-Banking Group’s shareholders contributed USD 250 million to a share capital increase in order to support the rapid growth of the Group which took place in the first half of the year. By June 30, 2008, total equity of Alfa-Banking Group amounted to USD 2.4 billion, a net increase of USD 535 million compared to December 31, 2007.

In 2008 Alfa-Banking Group continued its development as a universal bank with the following core business lines: corporate banking (including SME), investment banking and retail banking (including branch banking, consumer finance, auto and mortgage lending). The Alfa-Banking Group’s business model is focused on a rapid organic growth strategy, geographical expansion, further integration of business units and retaining highly-qualified staff.

In 2008 Alfa-Bank proved once again its leading position in the banking sector of Russia by winning numerous awards — among which are Best Domestic Bank 2008 by Global Finance, best bank in the “Customer Impressions of Retail Banking in Russia” research by PricewaterhouseCoopers and Senteo and National “Super Brand of the Year” by Superbrands International.

The corporate and retail client base has grown considerably during the last several years — by June 30, 2008 Alfa-Banking Group served over 51 000 corporate and 2.65 million retail customers, while the branch network has been extended to 301 offices across Russia and abroad.

Alfa-Bank was the first bank in Russia to be assigned a BBB- bank survivability assessment by the international rating agency Standard & Poor’s. In August 2008, Moody’s Rating Services confirmed the bank’s credit rating at Ba1/Stable and its individual rating at D+. Standard & Poor’s confirmed the bank’s credit rating at BB/Stable in December 2007.

Alfa-Banking Group’s IFRS figures have been reviewed by PricewaterhouseCoopers.