OREANDA-NEWS. April 05, 2012. B&N Bank has issued IFRS Consolidated Financial Statements for the year ended December 31, 2011 on the Group, reported the press-centre of B&N Bank.

As of December 31, 2011 total assets of the Bank increased by 14.5% and amounted to RUB 127.3 bln. (RUB 111.2 bln. in 2010). Asset growth was basically driven by increase in the loan book up to RUB 71.3 bln. (RUB 56.4 bln. in 2010) and funds due from banks up to RUB 22 bln. (RUB 10.6 bln. in 2010). Corporate loans (forming the biggest part of the loan book) increased by 30% and amounted to RUB 64.5 bln. Meanwhile, the retail loans remained at the same level totaling RUB 6.7 bln.

Loan book quality has significantly improved since the beginning of 2011: NPL 90+ ratio (calculated as overdue payments plus the principal amount of the loan) reduced from 6.83% down to 4.94%. It should be noted that the current NPL ratio reverts back to pre-crisis value and sets the Bank apart from its peers.

As at the end of 2011 total liabilities of the Bank increased by 14.6% and amounted to RUB 119.6 bln. (RUB 104.3 bln. in 2010). Customer accounts expanded substantially up to RUB 100.3 bln. (+19%). Retail deposits still remain the core funding source showing visible growth from RUB 60 bln. to RUB 69 bln.(+15%). At the same time, corporate deposits progressed from RUB 24 bln. to RUB 31 bln.(+29%).    

In 2011 the Bank’s total equity (Tier 1) amounted to RUB 7.7 bln.(+12,6%). The Bank’s capital base was expanded equally due to growth in the charter fund (in September 2011 the charter fund was increased by RUB 1.5 bln. via additional share issue) and profits. Tier 1 capital adequacy ratio per Basel I approach is 7.5% (Tier 2 – 11.2%), which is well above the minimum regulatory requirements and ensures a healthy capitalization. In 2012 the Bank plans a further RUB 3 bln. increase to the charter fund; the upcoming issue was registered with the CBR in January 2012. 

In 2011 interest income of the Bank increased up to RUB 10.3 bln. (+16%) compared to a year earlier. As a result of a significant increase in interest income and reduction of interest expense by 2%, net interest income (before provisions) increased from RUB 2.2 bln. to RUB 3.8 bln. At the same time, net non-interest income increased noticeably up to RUB 2.1 bln.(+38%), mostly due to gains on foreign exchange operations (+80%) and fee & commission income (+45%). Net interest margin climbed to 3.9% from 2.9% (as at the end of 2010). 

Net profit has grown more than sevenfold and totaled RUB 202 mln.(RUB 27.5 mln. a year earlier). Earnings growth in 2011 was driven by higher returns on core operations and further provision recovery. At the same time, provisioning level remains adequate to the Bank’s risks (provisioning rate is about 6%, coverage ratio 128%).

Profitability indicators have noticeably improved: ROA 0.2% (vs. 0.03% in 2010), ROE 2.8% (vs. 0.4% in 2010). 

Current liquidity reserves remain high. CBR prudential ratios governing liquidity are well above the minimum regulatory requirements: N2 “Instant Liquidity” – 102.98% at min. 15%; N3 “Current Liquidity” – 109.28% at min. 50%; N4 “Long-Term Liquidity” – 57.99% at max. 120%. It should be mentioned that over the past year N4 has declined from 87% to 58% as a result of the growth in capital base and long-term funding, enabling the Bank to invest in long-term assets.    

As of January 1, 2012 the Bank’s branch network covered 34 regions of the Russian Federation and accounted for 125 offices: 30 branches, 86 sub-branches in Moscow and regions, 2 operational offices, 6 operating cash desks and 1 representative office. During 2011 the Bank opened 6 new offices in Moscow, Moscow region, Novosibirsk, Stavropol and Krasnodar. At the same time, the Bank continued optimization of the branch network and closed several non-efficient points.