OREANDA-NEWS. February 27, 2012. BANK URALSIB (OJSC “URALSIB” or the Bank) (RTS: USBN) reports on preliminary 2011 financial results under Russian Accounting Standards (RAS) before post balance sheet events1.

Key achievements

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Net income of the Bank reached 3.9 bln rubles for the reporting period of 2011 before post balance sheet events. Pre-tax income amounted to 5.1 bln rubles.

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During the reporting period the Bank's assets increased by 3.6% to 423.5 bln rubles.

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The Bank’s loan portfolio increased by 16.8% to 258.3 bln rubles as of 31.12.2011.

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Fulfillment of obligations to international counterparties: due repayment of all international syndicated loans maturing in 2011.

Financial results

Net income of the Bank reached 3.9 bln rubles for the reporting period of 2011. Pre-tax income amounted to 5.1 bln rubles. IVQ2011 net income amounted to 1.2 bln rubles.

Selected Income Statement items

12M11

IVQ11

12M10

IVQ10

Change 12M11/12M 10

RUB mln

Net interest income

16,855

4,966

14,709

4,383

14.6%

Net fee and commission income

6,902

1,668

5,815

1,517

18.7%

Net gains from operations with securities

418

-660

693

-1

-39.7%

Net gains from operations with foreign currencies and precious metals

1,144

431

647

1,169

76.8%

Other non-interest income

306

35

496

161

-38.3%

Allowance recovery

2,058

1,164

846

-1,263

143.3%

Net operating income

27,682

7,604

23,207

5,967

19.3%

Operating expenses

-22,548

-6,884

-17,395

-5,131

29.6%

Pre-tax income/loss

5,134

721

5,812

836

-11.7%

Net income/loss

3,944

1,208

4,213

995

-6.4%

For the reporting period of 2011 the Bank’s net operating income increased by 19.3% and amounted to 27.7 bln rubles, while operating expenses grew by 29.6% and amounted to 22.5 bln rubles. The growth of operating expenses was mainly influenced by planned increase of personnel and accordingly higher staff costs. Expenses aimed at implementation of the Bank’s strategic objectives and business development also grew.

During the reporting period core banking income showed sustained growth (by 15.7%  in 2011) and reached 23.8 bln rubles. In particular, net interest income amounted to 16.9 bln rubles (14.6% growth vs y-o-y 2010). Net fee and commission income for 2011 exceeded 6.9 bln rubles with 18.7% growth vs y-o-y 2010.

Net gains from operations with foreign currencies and precious metals increased considerably in 2011 and reached 1.1 bln rubles (76.8% growth vs y-o-y 2010).

Income from recovery of allowances amounted to 2.1 bln rubles in 2011.

The share of core banking income in total operating income (before allowances) remained high in 2011 and amounted to 92.7%, the share of volatile income amounted to 6.1%.

Operating expenses/net operating income (before allowance recovery) ratio amounted to 88.0% in 2011.

Selected Balance Sheet items

31.12.2011

31.12.2010

Change, 31.12.11/31.12.10

RUB mln

Assets

423,480

408,648

3.6%

Equity

44,536

45,389

-1.9%

Loan portfolio (gross)

258,343

221,157

16.8%

Corporate loan portfolio

179,382

153,061

17.2%

Retail loan portfolio

78,961

68,096

16.0%

Customer accounts

281,117

293,937

-4.4%

Corporate customers accounts

144,921

176,129

-17.7%

Individual customers accounts

136,196

117,807

15.6%

Securities portfolio

76,998

91,235

-15.6%

In the reported period Bank’s assets grew by 3.6 % to 423.5 bln rubles mainly due to the loan portfolio growth.

The Bank’s loan portfolio increased by 16.8% and amounted to 258.3 bln rubles in 2011. Loans to corporate clients grew to 179.4 bln rubles (by 17.2%), loans to individuals increased to 79.0 bln rubles (by 16.0%). The growth of loan portfolio occurred along with essential decrease of interbank lending (by 38.4%).

The expansion of loan portfolio was accompanied by a remarkable improvement in its quality. The share of NPLs in loan portfolio reduced to 7.5% as of 31.12.2011 vs 9.7% as of 31.12.2010.

Customer accounts as of 31.12.2011 amounted to 281.1 bln rubles, decreased by 4.4% y-t-d. In particular, retail accounts reached 136.2 bln rubles (growth by 15.6% y-t-d) mainly due to the time deposits increase (by 19.4%). Corporate accounts inversely decreased to 144.9 bln rubles (by 17.7%). Time deposits of corporates demonstrated 15.0% growth in 2011 against outflow from current accounts (by 29.7%).

Loan portfolio/ customer accounts ratio increased to 91.9 as of 31.12.2011 vs 75.2% as of 31.12.2010.

The Bank’s securities portfolio as of 30.12.2011 amounted to 77.0 bln rubles squeezed by 15.6% y-t-d, which was mainly due to reduction of equity securities (by 27.6%) and units in investment funds (by 21.6%).

In the second half of 2011 the Bank raised two one-year syndicated term loans with the total amount of USD US 242 mln. Successful syndication in volatile international financial markets proves the solid standing of the Bank while its cost shows the confidence of our foreign partner banks.
Besides, in December 2011 the Bank duly repaid the syndicated loan with total amount of USD US 275 mln, borrowed in 2010.

Total regulatory capital under CBR methodology amounted to 53.3 bln rubles as of 01.01.2012. The capital adequacy ratio (N1) exceeded the minimum required level and reached 11.9% as of 01.01.2012.

1 Nonconsolidated financial results of OJSC URALSIB under Russian Accounting Standards (RAS). Following the results of post balance sheet events, the results may be updated. Calculations are done in accordance with URALSIB’s internal methodology.