OREANDA-NEWS. Gazprombank (Open Joint-stock Company) issued consolidated IFRS financial statements for the first quarter of 2013. Key financial indicators of Gazprombank Group are presented below:

billions of Rubles. %

 

31.03.2013

31.12.2012

Change

Assets

3 234.8

2 841.0

+13.9%

Equity

369.8

363.5

+1.7%

Corporate loans [1]

1 657.8

1 613.0

+2.8%

Retail loans [1]

224.6

210.3

+6.8%

Securities [2]

342.6

330.3

+3.7%

Cash and cash equivalents

752.1

432.1

+74.0%

Corporate deposits

1 798.3

1 427.5

+26.0%

Retail deposits

331.4

315.5

+5.0%

Capital market borrowings [3]

343.7

325.5

+9.6%

 

 

1Q2013

1Q2012

Change

2013 / 2012

 

 

 

Net income

5.6

12.3

-54.6%

Total comprehensive income

5.1

11.2

-54.2%

 

 

 

 

 

31.03.2013/ 1Q2013

31.12.2012 / 12M2012

Change

Total capital adequacy [4]

13.5%

13.9%

-0.4 p.p.

Tier I capital adequacy [4]

10.8%

11.0%

-0.2 p.p.

Non-performing loans [5] to gross loans to customers

1.1%

1.2%

-0.1 p.p.

Allowance for impairment to gross loans to customers

3.7%

3.6%

+0.1 p.p.

Loans1 to deposits ratio

88.4%

104.6%

-16.2 p.p.

Net interest margin [6]

2.8%

2.9%

-0.1 p.p.

Cost to income ratio [7]

51.8%

47.2%

+4.6 p.p.

[1] gross amounts (before allowance for impairment)

[2] includes trading securities, investments available-for-sale, investments in associates and investments held-to-maturity

[3] includes bonds issued and syndicated loans

[4] according to Basel II Framework (Basel II simplified standardised approach)

[5] loans are regarded as "non-performing" if the loan has been in default as to payment of principal or interest for 90 days or more

[6] calculated as net interest income for the reporting period over the chronological average of the balances of interest earning assets as at the end of each three-month period included in the reporting period. Interest-earning assets include due from credit institutions, loans to customers and debt securities (all before allowances for impairment)

[7] Operating expenses include banking salaries, employment benefits and administrative expenses. Operating income include net interest income, non-interest income and non-banking operating profits

Profitability and capital adequacy

Gazprombank Group’s (the "Group") net income per IFRS financial statements for the first quarter of 2013 amounted to RUB 5.6bn vs. RUB 12.3bn for the same period of 2012. Comprehensive income amounted to RUB 5.1bn for the first quarter of vs. RUB11.2bn for the same period of 2012.

The revenue from core banking business - net interest and fee income - increased by 33.8% in the first quarter of 2013 to reach RUB 19.4bn in comparison with RUB 14.5bn for the same period of 2012. Net interest margin for the first quarter 2013 was essentially flat at 2.8% compared to 2.9% for 2012.

At the same time our securities portfolio posted a negative revaluation due to a substantial deterioration of the Russian stock markets during the first quarter of 2013. Gains from securities, foreign currency and derivatives for the first quarter of 2013 amounted to RUB 1.1bn vs. RUB 8.0bn for the same period of 2012.

The Group’s operating expenses for 1Q2013 totaled to RUB 11.3bn, remaining flat (RUB 11.4bn) to the same period of 2012, while the cost/income ratio was 51.8%.

The Group’s capital increased by 1.7% vs. end-2012 thanks to income retention and reached RUB 369.8bn.

The total capital adequacy ratio per Basel II was 13.5% vs. 13.9% at end-2012, while Tier 1 ratio was practically unchanged at 10.8% at the end of March 2013 vs. 11.0% at 2012YE. Both capital ratios comfortably exceed minimum requirements set by the Basle Accord and are supportive to the Group’s business growth.

Balance sheet indicators and asset quality

During 1Q2013 the Group’s total assets increased by 13.9% and amounted to RUB 3 234.8bn. The asset growth was driven by the organic growth of banking operations in accordance with the Group’s strategy, as well as by a substantial one-time inflow of customer funds at the end of 1Q2013.

Corporate deposits totaled RUB 1 798.3bn as of 31 March 2013, up by 26.0% since the end of 2012. Retail deposits grew by 5.0% and reached RUB 331.4bn at the end of March 2013. Customer accounts continue to be the principal source of funding for the Group: their share in the funding base was 74.3% on 31 March 2013.

During the first quarter of 2013 the Group increased the volume of borrowings from debt capital markets by 9.6%, bringing their contribution to the total liabilities to 10.2%.

The inflow of customer funds at the end of the first quarter of 2013 resulted in a temporary growth of liquid assets on the Group’s balance sheet: cash and cash equivalents grew by 74% vs. the end of 2012, reaching RUB 752.1bn as of 31 March 2013.

The corporate loan book (gross of impairment) increased by 2.8% since end-2012 to reach RUB 1 657.8 bn, while the gross retail loan book increased by 6.8% over the same period from RUB 210.3bn to RUB 224.6bn. It is worth noting that the rates of growth in the Group’s loan books were higher than the Russian banking sector averages: while the corporate loans went up by 0.7% over the course of 1Q2013, the retail loans increased by 4.6%.

The Group’s securities portfolio expanded by 3.7% over the reporting period to reach RUB 342.6bn thanks to an increase in investments in liquid fixed income securities of Russian corporate issuers. Over 75% of the Group’s securities portfolio are represented by fixed income instruments.

Asset quality indicators remain traditionally high: at the end of 1Q2013 the share of non-performing loans was 1.1% of gross loans, while the impairment provisions were 3.7% of gross loans. This translates into a conservative coverage ratio of 3.4 times.

Deputy Chairman of the Management Board of Gazprombank Mr. Alexander Sobol commented: "Taking into account the market conditions that prevailed during the first quarter of 2013, we view the Bank’s performance as generally satisfactory. The substantial liquidity position that we accumulated towards the end of the quarter enabled us to meet the increased demand for loans in the 2nd quarter. Given the improving banking segment indicators, traditionally high asset quality and the current pace of business growth, we expect a moderate and stable growth in our Bank’s business in 2013".