OREANDA-NEWS. September 10, 2012. The Alfa Banking Group, which includes Alfa-Bank and its subsidiaries, today reported IFRS financial results for the first half 2012, reported the press-centre of Alfa-Bank.

Net profit of the Alfa Banking Group for the period amounted to USD 544 million (1H 2011 — USD 275 million), representing a 29.7% return on average equity. Total equity increased by 13.5% to USD 3.9 billion. The Alfa Banking Group maintained a high capital adequacy ratio of 17.4%, mostly due to a solid growth of retained earnings in the period ended June 30, 2012 (December 31, 2011 — 16.7%).

In the reporting period the Alfa Banking Group recorded an increase of its total assets of 7.9% to USD 33.9 billion at June 30, 2012 from USD 31.4 billion at December 31, 2011. As at June 30, 2012, total gross corporate loans increased by 3.1% to USD 21.1 billion (USD 20.4 billion as at December 31, 2011), while total gross loans to individuals increased by 11.1% to USD 3.1 billion (USD 2.8 billion as at December 31, 2011). During first half 2012, the Alfa Banking Group’s gross loan portfolio and total assets grew in line with the market. The overall provisioning rate decreased from 5.9% as at December 31, 2011 to 4.9% as at June 30, 2012 resulting from continuously improving loan portfolio quality and gradual redemption of problem debts. Share of overdue loans (by one and more days) in total portfolio decreased from 2.6% as at December 31, 2011 to 2.2% as at June 30, 2012. Overdue loans are covered by loan loss provisions by 222% as at June 30, 2012 (230% as at December 31, 2011).

In the funding structure of the Alfa Banking Group, customer accounts grew by 5.4% to USD 19.2 billion as of June 30, 2012 (USD 18.3 billion as of December 31, 2011). In June 2012 the Alfa Banking Group issued USD 200 million Euro Commercial Paper Notes with 12 month maturity at a discount to the nominal value of 4.88% p.a. In first half 2012, two debt securities issues were redeemed according to the repayment schedule: notes issued under the DPR Programme were redeemed in March, the USD 500 million Euro Medium Term Notes were redeemed in June.

At June 30, 2012, the Alfa Banking Group held approximately 9.1% of its total assets in cash and cash equivalents. Furthermore, the Alfa Banking Group has an investment portfolio of highly liquid debt securities available for sale in the amount of USD 1.2 billion, and has access to secured and unsecured borrowing facilities provided by the Central Bank of Russia.

The Alfa Banking Group has maintained its position as the top Russian private bank by total assets, total equity, customer accounts and loan portfolio. Market share by retail demand accounts is constantly growing and stood at 6.4% as at 30 June, 2012 according to management computation and CBR statistics. In first half 2012, the Alfa Banking Group continued its development as a universal bank with the following core business lines: corporate and investment banking (including SME, transaction banking, trade and structured finance, leasing and factoring), and retail banking (including consumer finance, retail lending and credit cards, current accounts and deposits, services through remote channels). According to the strategy of the Alfa Banking Group adopted in December 2011, the strategic priority is to maintain its status as the leading private bank in Russia, while enhancing stability and profitability, and to set the industry standards in key areas such as customer experience, technology, efficiency and teamwork.

In July 2012, Fitch Ratings upgraded the long term credit rating of Alfa-Bank to BBB-, stable outlook. Alfa-Bank became the first privately owned Russian bank with an investment grade rating assigned by one of the leading international rating agencies. In December 2011, Standard & Poor’s raised the long-term credit rating on Alfa-Bank to BB, while the outlook was changed from stable to positive in July 2012. In April 2012, Moody’s confirmed their rating at Ba1 with a stable outlook.