OREANDA-NEWS. April 25, 2011. ZENIT Banking Group, one of the leading private financial institutions of Russia, announces its IFRS audited consolidated financial results for the year ended December 31, 2010, reported the press-centre of ZENIT Banking Group.

KEY 2010 FIGURES
Total assets of ZENIT Banking Group increased by 7.4% to 199.8 bln rubles;

Loans to customers increased by 25.9 bln rubles (25.6%) to 127 bln rubles with allowance for loan impairment up to 9.8 bln rubles. Loan loss provision rate stood at 7.2%;

Net profit increased by 75.2% to 3.7 bln rubles;

Customer accounts increased by 11.5 bln rubles (11%) to 116.2 bln rubles;

Cost to income ratio is still at a comfortable level of 44.3%, having slightly increased from 41.6% in 2009.

“Amid the economic recovery and fiercer competition in the banking services market, the top priority strategic objectives of ZENIT Banking Group in 2010 were the search for growth points and improvement of business efficiency. Major efforts were focused on the expansion of corporate banking.

As a result, we note a tangible increase in the client base, loan portfolio growth and considerable expansion of debt finance origination in the public markets for corporate clients. In general, we have met objectives set for 2010. We are satisfied to acknowledge positive growth dynamics in all major business areas,” Kirill Shpigun, Chairman of the Management Board of OJSC Bank ZENIT commented on the 2010 financial results.

“In 2011, the major strategic priorities of the Group will be further increase in corporate and retail lending, expansion of the banking network and business efficiency improvement,” he defined the 2011 perspectives.

GROUP FINANCIAL OVERVIEW
The active efforts of ZENIT Banking Group to develop lending against the favorable economic situation and high level of liquidity led to the corporate loan portfolio growth. In 2010, the total loans to customers before impairment increased by 25.1% to 136.8 bln rubles at the year-end.

As long as the effective demand of the population recovered in the second half of 2010, the Group resumed extension of retail loans. At the end of the year 2010, the retail loan portfolio exceeded 9.5 bln rubles.

The loans, in respect of which the clients have payments overdue for more than 90 days, amounted to 7.3 bln rubles (5.3% of loans to customers before impairment). The allowance for loan impairment increased in 2010 and made up 9.8 bln rubles. Thus the coverage ratio for such loans amounted to 134% as of December 31, 2010. In order to retain the high quality of the loan portfolio the Group kept on improving approaches to the assessment of the borrower’s credit risk and collateral quality.

The securities portfolio increased by 45.7% to 23.5 bln rubles, the principal portion of which (56%) is the ruble-denominated corporate bonds. These are mainly the securities of high quality on the Lombard List of the Central Bank of the Russian Federation. Another 21% of securities are federal loan bonds, local authorities bonds and CBRF bonds.

Customer accounts increased by 11.5 bln rubles (11%) to 116.2 bln rubles mainly due to the considerable inflow of funds from individuals. Following the 2010 results, the growth of individual account balances exceeded 33%.

Bank ZENIT is a traditional leader in the Private Banking sector due to the impeccable quality and high level of offered services. Following the 2010 results, the funds of the Private Banking clients under management of Bank ZENIT amounted to 43%; the liabilities increased by 46%.

Bank ZENIT raised a USD 100 mln financing from the leading European financial institutions under a 1-year club deal.

The Total capital ratio of ZENIT Banking Group decreased from 18.6% to 16.3% at the end of the year 2010, while the Tier 1 capital ratio decreased from 12.8% to 11.9%, which is above all due to the considerable (by almost 26%) increase in the aggregate loan portfolio.

In 2010, there was a controlled increase in the Group’s operating expenses due to the expansion of business volumes and resumed growth of the banking network. The operating expenses increased by 15.9% to 5.7 bln rubles, while the cost to income ratio increased from 41.6% at the end of 2009 to 44.3% at the end of the year 2010.

SUBSEQUENT EVENTS
In February 2011 the Board of Directors of Bank ZENIT made a decision on issuance of five ruble exchange-traded bond issues in the total amount of 21 bln rubles.

The maturity dates of subordinated loans to the amount of over 3.6 bln rubles were extended from years 2012-2013 until years 2017-2018.