OREANDA-NEWS. December 29, 2012. TransCreditBank Group released the reviewed Interim Condensed Consolidated Financial Statements under IFRS for the nine-month period ended September 30, 2012.

9M:2012 Financial Highlights

Net profit for the nine-month period from 1 January 2012 amounted to RUB 8.5 billion, which is 71% higher than net profit earned in 9M:2011. Nine-month profit was RUB 3.3 billion, i.e. a 74% increase YoY

Net interest income increased 32% to RUB 19.6 billion; net commission income was up 22% to RUB 4.7 billion

Net interest margin was up 5.7% against 5.1% in 9M:2011

ROE (annualized) stood at 24.9%

ROA (annualized) was 2.3% compared to 1.6% in 9M:2011

Gross loans rose 17% from YE2011 to RUB 393.2 billion, with corporate portfolio up 14% to RUB 281.3 billion and retail loan portfolio increased by 26% to RUB 112.6 billion.

The share of non-performing loans (NPL), more than 90 days overdue, in total loan portfolio stood at 2.3% (2011: 2.4%)

Shareholders’ equity grew 44% to RUB 52 billion

Total capital adequacy ratio according to Basel Accord was 15.6%; Tier 1 ratio — 11.7%.

“Net profit of 8.5 billion rubles is a good result, surpassing the previous nine-month period by 71%, — Alexey Krokhin, TransCreditBank’s President commented on the results. – The Bank showed a solid growth of loan portfolio, with a 26% upsurge in retail lending for the first nine months of 2012”.

Income statement review

Net interest income for the nine-month period 2012 improved by 32% YoY to RUB 19.6 billion showing growth rate of 10% in the third quarter. Interest income from retail lending for the nine-month period amounted to RUB 11.9 billion, which is a 49% increase compared to 9M: 2011.

Net interest margin was up 5.7% against 5.1% in 9M:2011.

Non-interest income increased by 93% to RUB 7.3 billion, primarily due to growth in income from trading securities – RUB 2.6 billion versus a RUB 1.6 billion loss in 9M:2011. Net commission income grew up to RUB 4.7 billion, a 24% increase YoY. The share of non-interest income in operating income before provision for impairment was 27% compared to 20% YoY.

Operating income before provision for impairment was RUB 26.9 billion, 44% up YoY.

Provisions for loan impairment rose by 88% YoY to RUB 4.9 billion, following intense lending expansion with a conservative approach to loan provisioning and economic environment assessment preserved.

Non-interest expenses were RUB 11.2 billion, 14% up YoY while the Bank improved its cost efficiency to 41.3% as compared with 52.2% in 9M:2011 and the trend continues.

Assets structure

As at 30 September gross loan portfolio grew by 17% to RUB 393.9 billion compared to the YE2011.

Corporate loan portfolio increased by 14% to RUB 281.3 billion. The loan book is highly diversified by industries: transportation industry, traditional for the Bank — 25%; manufacturing – 15%, construction and trade – 18% each. Loans to Russian Railways Group totaled RUB 15.9 billion with a share of 5.7% in corporate loan portfolio.

Retail loan portfolio was up 26% or RUB 112.6 billion due to a 41% YoY growth in consumer loans. The share of consumer loans in total retail portfolio increased up to 67% or RUB 74.9 billion with a 90% share or RUB 67.7 billion worth of loans issued to Russian Railways employees. The share of loans to Russian Railways employees in total retail portfolio amounted to 86% (2011: 85%).

The share of NPL (more than 90 days overdue) in total loan portfolio stood at low 2.3% (2011: 2.4%). The Bank has been pursuing a conservative policy in customer lending in order to maintain the high quality of the loan portfolio. The share of NPL in corporate loans remained virtually unchanged – 2.3% versus 2.2% at YE2011; NPL in retail portfolio – 2.4% and 2.9%, respectively. Provision secured coverage for 191% of NPL compared to 174% at YE2011.

Provision for loan impairment rose to RUB 17.5 billion by 25% against YE2011; provision to loans ratio grew by 4.4% from 4.2% YE2011.

TransCreditBank’s trading securities portfolio amounted to RUB 65.7 billion or 12% of total assets as at 30 September 2012. In trading portfolio management the Bank is following a new strategy to reduce the volume of active trading operations and to maintain short-term debt securities trading portfolio. Russian state bonds (OFZ) accounted for 68% of the total portfolio and 26% — fall on Russian corporate bonds.

The Bank’s client funds amounted to RUB 292.6 billion including corporate deposits of RUB 214.7 billion and retail deposits of RUB 77.9 billion.

Loan-to-deposit ratio was 129% with 94% at YE2011.

As at 30 September 2012 the Bank’s total capital increased by 44% up to RUB 52.1 billion as a result of additional share issue in the 1st quarter 2012 and profit capitalization.