OREANDA-NEWS. June 02, 2011. BANK URALSIB (OJSC “URALSIB” or the Bank) (RTS: USBN) reported IFRS  results of its financial performance for the twelve-month period ended December 31, 2010.


Comments to the report on 2010 financial results under IFRS

 Key financials and ratios 31.12.2010 31.12.2009
Return on assets (RoA) 0.4%1 0.4%
Return on equity (RoE) 3.0%1 3.2%
Total capital adequacy (under Basel Accord) 18.1% 18.7%
Tier 1 capital adequacy  (under Basel Accord) 13.7% 14.2%
Operating expenses/Net operating income (C/I) 91.0%1 54.8%
NIM 5.6% 6.0%
Impairment, RUB mln 161 -13,126
Net operating income, RUB mln 21,4791 21,365
Operating expenses, RUB mln 19,407 18,909
Net income, RUB mln 1,7761 1,728
Assets, RUB mln 416,364 415,264

In view of general market interest rate decrease and stronger competition in the course of 2010, the Bank’s main efforts were aimed at improvement of assets quality and maintenance of interest margin level, advanced reduction of customer funding costs and balancing assets and liabilities.
This resulted in the recovery of allowances for impairment for the amount of 0.2 bln RUB against net loss from allowances for impairment of 13.1 bln RUB in 2009.
In spite of the fact that loan portfolio during the year decreased by 5.4%, in IIH2010 we managed for the first time in the post-crisis period to achieve its growth while retaining its industry diversification structure and decreasing its concentration– this growth amounted to 4.7% in IIH2010.
Our policy of gradual lowering of funding costs and funding concentrations, together with the reduction of excessive customer deposits enabled the Bank to overcome the NIM reduction trend and ensure the sustained growth of this index from 1.9% in IQ2010 to 7.1% in IVQ2010. Concentration of top-10 customer deposits dropped by 9 p.p. and amounted to 25% of total customer funding as of 31.12.2010.
In 2010 Bank considerably reduced its related parties assets concentration: from 106% to 50% of equity.
In 2010 Bank continued to implement the cost management programme. This resulted in the operating expenses growth (2.6% during the year) being considerably lower than the inflation level (8.5%).
The management of the Bank is confident that operational environment and the Bank’s internal processes will continue to improve with positive impact on the Bank’s results in 2011.