OREANDA-NEWS. April 12, 2013. B&N Bank has issued Consolidated Financial Statements for the year ended December 31, 2012.
During the reporting period B&N Bank (ranks among Top-40 Russian banks in terms of assets) substantially increased its assets, equity and profitability.

As of January 1, 2013 the Bank ranked 36th among “Top-200 Russian Banks by Net Assets”, 21st among “Top Banks by Retail Deposits” and 4th among “Top-100 Most Reliable Russian Banks” according to business magazine “Profile”.  Moreover, as of February 1, 2013 B&N Bank is included into Top-30 Russian banks according to monthly data published by the Central Bank of the Russian Federation.

Total assets of the Bank increased by 33% and amounted to RUB 169.1 billion (RUB 127.3 billion in 2011). Growth in assets was driven by increase in the loan book to RUB 85.6 billion (RUB 71.3 billion in 2011) and trading security portfolio to RUB 18 billion (RUB 15.8 billion in 2011). Corporate loans, which form the major part of the loan portfolio, increased by 18% and amounted to RUB 76.4 billion. According to the development strategy, in 2012 B&N Bank noticeably increased its retail lending resulting in 36% growth in the retail loan book up to RUB 9.2 billion.

Due to continuous monitoring of the loan book quality and successful implementation of bad debt preventive measures, as of January 1, 2013 NPL 90+ ratio declined to 3.3% from 4.9% as of the end of 2011. The current NPL ratio ensures the loan book quality above the market average.

B&N Bank’s investment portfolio increased due to corporate bonds which are represented by highly liquid securities included in the Lombard List of the Central Bank of Russia.

Total liabilities as of the end of 2012 grew by 31% and totaled RUB 156.7 billion (RUB 119.6 billion in 2011). Basically, liability growth derived from the increase in customer accounts up to RUB 136.5 billion (+36%), debt securities issued up to RUB 5 billion (+278%) due to placement of 1 and 2 series of Euro-Commercial Paper and subordinated debt of RUB 6 billion (+26%).

Retail deposits represent most of the customer funding base which grew by 24% from RUB 69.2 billion to RUB 85.5 billion. At the same time, corporate customer funds increased as well from RUB 31.2 billion to RUB 50.9 billion (+63%), mostly due to state-owned companies.

Tier 1 capital grew from RUB 7.7 billion to RUB 12.5 billion (+61%). Drastic increase in the core capital was driven by several Tier 1 capital injections of RUB 4 billion and sustainable profit. Tier 1 capital ratio per Basel 1 approach stood at 8.3% (Tier 2 CAR – 12.3%), which is well above the minimum regulatory requirements and ensures a healthy capitalization. In 2013 the Bank expects to increase its capital by RUB 3 billion via another additional share issue (registered by CBR in early January 2013).   

The Bank’s interest income amounted to RUB 13.7 billion, an increase of 32% compared to the end of 2011. Due to a significant increase in interest income, net interest income (before provisions) increased from RUB 3.8 billion to RUB 4.3 billion.  Net non-interest income also rose to RUB 3.7 billion (+74%), mainly due to commission income and gains on security and foreign exchange operations.

B&N Bank’s net profit in 2012 increased 3.7x to RUB 752 million (RUB 202 million in 2011). Positive dynamics of profitability derives from the increased income on the Bank’s core operations (mainly due to corporate business), and successful development of the new strategic business lines – SME and retail sectors.

Profitability indicators have significantly improved: RoAA 0.5% (versus 0.2% in 2011), RoAE 7.4% (versus 2.8% in 2011). 

Current liquidity reserves remain traditionally high. CBR prudential ratios governing liquidity are well above the minimum regulatory requirements.

As of January 1, 2013 the Bank’s branch network covered 34 regions of the Russian Federation and accounted for 134 offices: 30 branches, 94 sub-branches in Moscow and regions, 3 operational offices, 6 operating cash desks and 1 representative office. In 2012 the Bank opened 14 new offices in Moscow, Moscow region, St. Petersburg, Novosibirsk, Ulyanovsk, Chelyabinsk, Barnaul, Krasnodar and other cities, including two B&N Exclusive offices.   

During the reporting period B&N Bank demonstrated good balance sheet figures and considerable results of the first implementation phase of its long-term development strategy. Despite the fact that in 2012 B&N Bank continued investments in its strategic initiatives, it did not have any pressure on its profitability and capitalization (cost-to-income ratio decreased by 4 p.p. since 1H2012). In 2013 B&N Bank plans to diversify its business, expand the customer base, strengthen the market positions and increase its revenues.