OREANDA-NEWS. February 07, 2011. Sviaz-Bank has totaled up the preliminary results of its performance in 2010. The package of measures the Bank undertook last year brought the Bank 6.03 billion rubles in net profit [1] compared with 5.6 billion rubles in losses a year before. The Bank’s business developed at much higher rates than it had set out in its plans for 2010, reported the press-centre of Sviaz-Bank.

In spite of heavy competition in the banking industry, Sviaz-Bank increased its net assets by 53% to 176.2 billion rubles. Its actual capital adequacy rate rose above 21%, doubling from the 10% minimum rate fixed by the Bank of Russia.

By January 1, 2011, the Bank had fulfilled exactly on time all the measures laid out in its Plan to regain financial health, including the transfer of problem assets to Vnesheconombank in late 2010 under claim assignment agreements involving a total amount of 62 billion rubles in principal, which had a positive effect on the quality of the Bank’s loan portfolio. As a result, the reserves built up by the Bank contracted by 58.8 billion rubles. The total positive financial result produced by the transfer of assets to Vnesheconombank in 2010 worked out to 1.5 billion rubles.

The Bank’s business growth rates in all areas were significantly higher than those registered by the banking services market in the Russian Federation. The contributing factors included introduction of a series of new programs and banking products for all groups of customers, for example, mortgage and consumer loans, loans to small businesses, and investment services, among others.

The Bank’s proactive, yet balanced, lending policy helped it to put together a high-quality loan portfolio of corporate customers. The portfolio of loans to legal entities of quality classes 1 to 3 rose 2.2-fold over the year, to 67.1 billion rubles. Although the Bank continues to give primary attention to development of long-term relations of partnership with communications and energy businesses, its loan portfolio has become significantly more diversified.

The Bank’s portfolio of loans to small and medium-size businesses had gone up by 68%, to 5.3billion rubles.

The Bank’s intensive efforts to recruit new customers had helped it to expand its resources significantly, in particular, the balances in the corporate customers’ accounts climbed up by 80% to 83.4 billion rubles in 2010, compared with the average growth rate of around 10% in the banking system.

In 2010, the Bank kept up dynamic development of its retail business. The Bank had been ranked invariably in the group of leaders in the growth rates of transactions with individual customers throughout the year, with growth rates significantly higher than the averages for the banking system. For example, the balances in the current and deposit accounts of individuals doubled to 12.8billion rubles. The portfolio of loans issued to individuals of quality classes 1 to 3 registered a threefold increase by yearend, to 4.1 billion rubles.

The Bank’s investment business went on expanding as well. The quality of its securities portfolio changed greatly in structure, in particular, the share of investments in government and subfederal papers and corporate bonds on the mortgage list went up. In 2010, Sviaz-Bank was one of the most assertive managing underwriters of initial public offerings of real sector bonds, with total issues in which it was involved running to 96.25 billion rubles, or over 9% of the total public offerings in the Russian market. Sviaz-Bank was chosen as the managing underwriter of bonds issued by some of the biggest Russian companies, including EuroChim OJSC, EurazHolding OJSC, ALROSA CJSC, TransContainer OJSC, SUEK OJSC, Mechel OJSC, OJSC TGC-9, OJSC TGC-6, and OJSC TGC-2, among others.

As part of its sustained strategy to enhance the efficiency and expand the Bank’s territorial network, a new regional branch opened in Kazan, Tatarstan, in December 2010, and a branch is to open soon in Kemerovo.

[1] All the figures cited here do not include events after the reporting date (EARD).