OREANDA-NEWS. April 21, 2009. In the reporting period Alfa-Banking Group demonstrated significant growth of its total assets to USD 27.1 billion, up 19.4%  from USD 22.7 billion at the end of 2007, reported the press-centre of Alfa-Bank.

Total equity increased by 15.8%  to USD 2.2 billion (2007 — USD 1.9 billion). Operating profit grew by 19.8%  to USD 1.21 billion (2007 — USD 1.01 billion) due to a significant growth of interest and commission revenues from core banking activities. Net margin from lending operations increased by 53.7%  to USD 1 381.9 million (2007 — USD 899.0 million), while net commission income grew by 31.9%  to USD 340.9 million (2007 — USD 258.4 million).

Effective cost optimization policy led to a substantial cost reduction and progress in cost-to-income ratio, which dropped to 36.6%  (2007 — 55.5%). At the same time net profit after tax slightly decreased by 9.2%  to USD 230.1 (2007 — USD 253.5 mln) as a result of significant increase of loan loss provisions. The provision rate was raised to 6.2%  of the total loan portfolio from 2.4%  as at year-end 2007. The total gross loan portfolio grew by 22.3%  to USD 19.2 billion (2007 — USD 15.7 billion). The corporate loan portfolio rose by 20.4%  to USD 16.5 billion, while loans to retail clients increased by 50.0%  to USD 2.7 billion at December 31, 2008.

Despite turbulent market conditions Alfa-Banking Group remains the top Russian private bank and successfully overcame the first stage of the financial crisis, effectively managing its liquidity risks, currency risks and capitalization risks. Alfa-Banking Group has accumulated a significant liquidity buffer totaling about USD 3 billion, and has access to various additional liquidity instruments provided by state institutions.

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. From November 2008 to January 2009 Alfa-Banking Group successfully repaid another three syndicated loans totaling about USD 900 million. Currently Alfa-Banking Group has a total of USD 1 billion of foreign borrowings maturing by year-end, and repayment of these liabilities is expected to be financed from organic cash flows.

In January 2009 Alfa-Banking Group was the first private bank to receive an unsecured subordinated loan from state VneshEconomBank in the amount of RUB 10.2 bln (USD 294 mln), in accordance with the government support program for the banking sector.

In 2008 Alfa-Banking Group continued its development as a universal bank with the following core business lines: corporate and investment banking including SME, retail banking (including branch banking, auto and mortgage lending). Among significant events were unification of all retail banking products into a single business division and merger of the corporate and investment banking businesses. Current strategic priorities include focus on maintaining liquidity, effective restructuring of problem loans and collections, capital preservation and introduction of new corporate and investment, and retail products.

In 2008 Alfa-Banking Group proved once again its leading position in the banking sector of Russia by winning numerous awards — among which are Best Bank in Russia in 2008 by Euromoney, Best Domestic Bank in 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 March 1, 2009 Alfa-Banking Group served over 56 000 corporate and 3.5 million retail customers, while the branch network has been extended to 333 offices across Russia and abroad.
In February 2009, Moody’s Rating Services confirmed the Group’s credit rating at Ba1, outlook Negative. In December 2008 Standard & Poor’s downgraded the credit rating by one notch to BB- along with many other of Russia’s largest banks due to deteriorating economic conditions, while the outlook changed from Negative to Stable. In February 2009 Standard & Poor’s confirmed the Group’s survivability assessment at BBB-.

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