OREANDA-NEWS. May 25, 2012. B&N Bank has issued IFRS interim consolidated financial statements (unaudited) for the first quarter of 2012.

During the reporting period, the Bank has demonstrated a significant increase in profit, stable dynamics of the loan book and funding base, as well as high level of liquidity reserves.

Since the beginning of 2012 the Bank's total assets increased by 1% and amounted to RUB 129.2 bln (RUB 127.3 bln as of year-end 2011). Asset growth was basically driven by increase in trading securities portfolio by 16% (from RUB 15.8 bln as of year-end 2011 to RUB 18.3 bln) and the loan book by 5% (from RUB 71.3 bln as of year-end 2011 to RUB 74.6 bln).

In line with its development strategy, the Bank continued to diversify its corporate loan portfolio with particular emphasis on lending to SMEs. During the 1st quarter of 2012 the volume of loans granted to SMEs increased by 12% and amounted to RUB 5 bln (RUB 4.5 bln as at the end of 2011).

The level of problem loans continues to decline. As of April 1, 2012 NPL 90+ ratio stood at 4.8% (4.9% as at the end of 2011), which reflected the effective work of the Bank on problem loans recovery.

Due to conservative risk management policy, provisioning level remains adequate to the Bank’s risks at 6%, and the coverage ratio (provisions/NPL 90+) - 131%.

As at March 31, 2012 total liabilities demonstrated a slight growth (+1%) and amounted to RUB 121.2 bln. At the same time, visible growth is observed in funds due to banks and other financial institutions (+18%) and subordinated debt (+21%). In the first quarter of 2012 the Bank raised a subordinated loan amounting to USD 50 mln for 10 years. Meanwhile, customer accounts remained approximately at the same level and amounted to RUB 99.5 bln.

Due to profit received in 1Q2012 Tier I capital increased by 2% and amounted to RUB 7.9 bln against RUB 7.7 bln as at the end of 2011. CBR capital adequacy ratio (N1) remains at a high level of 12.5%. In accordance with B&N strategic plan in mid-2012 Tier I capital will be increased by RUB 3 bln due to registered additional issue of ordinary shares.

Bank's net profit for 1Q2012 increased 2.6 times compared to the same period of the last year and amounted to RUB 181 mln. Positive dynamics of profitability derives from the increased income on the Bank’s core operations. Net interest income (before loan loss provisions) increased by 28% and amounted to RUB 945 mln. Net non-interest income grew by 56% and totaled RUB 807 mln, mostly due to gains on securities (RUB 200 mln) and FOREX operations (RUB 263 mln).

In 1Q2012 profitability indicators demonstrated further improvement: ROA 0.6% p.a. (against 0.2% as of year-end 2011), ROE 9% (against 2.8% as of year-end 2011).  Another positive factor was cost/income ratio which declined to 78.4% (98.3% as of year-end 2011).

Current liquidity reserves remain high. CBR prudential ratios governing liquidity are well above the minimum regulatory requirements: N2 “Instant Liquidity” – 99.3% at min.15%; N3 “Current Liquidity” – 147.85% at min. 50%; N4 “Long-Term Liquidity” – 54.03% at max. 120%.

As of April 1, 2012 the Bank’s branch network covered 34 regions of the Russian Federation and accounted for 126 offices: 30 branches, 87 sub-branches in Moscow and regions, 2 operational offices, 6 operating cash desks and 1 representative office.