Bank Uralsib Announced 1H Financial Results under RAS

OREANDA-NEWS. On 22 July 2009 BANK URALSIB (Bank) (RTS: USBN) reported 2Q and 1H 2009financial results under Russian Accounting Standards (RAS).

Net income reached 345 million Rubles in IH09 with pre-tax income 385 million Rubles. Due to positive financial results in 2Q09 amounting 2.048 billion Rubles, Bank managed to lever losses of IQ09 amounting 1.702 billion Rubles.

Considerable growth of income from operations with securities, and recovery of allowances for loan losses were the major factors to affect positive financial result of 2Q09 and first six months of 2009.

Favorable conditions of Russian stock market allowed showing sharp growth of net gains from operations with securities – 1.588 billion Rubles in 2Q09. These gains resulted from trading operations with equity and debt financial instruments and securities revaluation.

Reduction of overdue loans and certain stabilization of credit portfolio quality led to recovery of allowances for loan losses in June, 2009 (reduction by 67.6 % q-o-q).

Following the results of IH09 net interest income amounted 8.578 billion Rubles; net fee and commission income - 2.921 billion Rubles. Certain decrease in net interest income in April and May was partially offset by growth in June (increase by 29.5% m-o-m to 1.515 billion Rubles).

Net fee and commission income following the results of 2Q09 remained practically unchanged comparing to IQ09, however showing considerable growth in June – by 13.9% m-o-m.

Similar dynamics were observed regarding income from operations with foreign currency and precious metals. Gains from these operations have reached 590 million Rubles in IH09.

Thus, net operating income increased by 2.3 times in 2Q09 vs IQ09 and reached 9.176 billion Rubles for IH09.

Due to costs cutting program operating expenses in 2Q09 reduced by 0.6% vs. first 3 months of 2009; thus personnel expenses decreased by 11.5% for the same period. The rigid control of expenses allowed improving 1H09 Cost-to-Income (C/I) to 53.1 %.

During the reporting period (31.12.2008-30.06.2009) assets reduced by 4.9 % to 405.2 million Rubles. This dynamics was caused by reduction of loan portfolio and essential fluctuations of customer accounts in April-May. Also, assets reduction was caused by redemption more than 1/3 of medium and short-term obligations to the Central Bank. In June total assets showed positive 2.0% growth.

From the beginning of the year loan portfolio dropped to 216.2 billion Rubles (by 18.3%). Loans to retail customers decreased slightly - to 77.6 billion Rubles (by 6.2%), loans to corporate customers - to 138.6 billion Rubles (by 23.8%). Similar dynamics were caused by toughening of risk-management due to crisis.

Customer accounts as of 30.06.2009 reached 218.2 billions Rubles, showing positive dynamics vs. the beginning of the year (by 1.9%). Individual accounts growth rate remained at the stable level within last 6 months. Corporate accounts increased to 77.8 billion Rubles (by 21.7%); in particular, current accounts increased by 48.4%. Corporate accounts showed high volatility within IH09, demonstrating reduction by 6.6% to 140.5 billion Rubles. Thus in June corporate accounts have increased by 2.0 %; in particular, current accounts have increased by 11.3 %.

Loan portfolio/customer accounts ratio decreased to 99% as of 30.06.2009 vs. 124% as of 31.12.2008.

Net income for the reported period and increase of the authorized capital by 6.1 billion Rubles as a result of additional share issue led to increase of capital under CBR methodology by 16.1% from the beginning of year - to 56.7 billion Rubles as of 01.07.2009. As a result, the capital adequacy ratio (Н1) highly exceeded the minimum level and increased by 16.3% as of 01.07.2009.