OREANDA-NEWS. December 09, 2013. Raiffeisenbank results for 9 months of 2013 are provided in accordance with the International Financial Reporting Standards (IFRS) and may differ from the "Russia" segment data in Raiffeisen Bank International financial report as a result of the differences arising from consolidation.

Profit after tax for nine months of 2013 amounted to RUB 16 076.0 million, an increase of 11.7% compared to RUB 14 392.3 million for nine months of 2012.

Operating income before provisioning[1] for nine months of 2013 increased by 14.3% to RUB 38 427.0 million compared to RUB 33 630.6 million obtained in the same period of 2012.

Loans and advances to customers (before deduction of provision for loan impairment) rose by 13.9% as compared to the end of 2012 and amounted to RUB 443 094.2 million as of 30.09.2013.

The quality of the loan portfolio continued to improve: as of 30.09.2013 the share of loans individually determined to be impaired in the gross loan portfolio amounted to 4.6%, which is 0.9 percentage points lower than the figure as of 31.12.2012.

The growth of retail loan portfolio with its high quality maintained. Share of loans individually determined to be impaired in retail portfolio decreased by 1.0 percentage point from 5.4% (as of 31.12.2012) down to 4.4% (as of 30.09.2013)

Customer accounts grew by 16.9% within nine months of 2013 and reached to RUB 467 369.1 million as of the end of nine months of 2013. Their share in total liabilities of the bank amounted to 79.8% as of 30.09.2013

Return on equity after tax[2] reached 19.9% as of 30.09.2013. Return on equity before tax[3] by the end of the third quarter of 2013 was 25.4%.

Capital adequacy ratio (N-1)[4] as of 01.10.2013 was 12.6%. Total capital adequacy ratio according to Basel II as of 30.09.2013 amounted to 18.4%.

INCOME STATEMENT
Profit after tax for nine months of 2013 increased by 11.7% (or RUB 1 683.7 million) to RUB 16 076.0 million compared to RUB 14 392.3 million received in the same period of 2012.

Operating income before provisioning[5] increased by 14.3% (or RUB 4 796.4 million) to RUB 38 427.0 million in nine months of 2013 compared to RUB 33 630.6 million in the same period of 2012, primarily due to a positive dynamics of net interest income before provisioning for impairment losses[6] and net fee and commission income.

Net interest income before provisioning for impairment losses[7] in nine months of 2013 increased by 17.1% or RUB 3 920.4 million as compared to the same period of 2012 and reached RUB 26 787.0 million, mainly due to the increase in interest income on loans and advances to retail customers (by 31.6% or RUB 3 815.7 million) due to the growth in retail loan portfolio (by 47.5% as compared to the figure as of 30.09.2012).

Net fee and commission income increased by 18.4% (or RUB 1 219.9 million) to RUB 7 855.2 million in nine months of 2013 as compared to the figure at the same period of 2012. The main drivers of growth were net commissions on operations with plastic cards (+25.3% or RUB 554.7 million to RUB 2 751.5 million) as a result of the increase in the number of plastic cards served, as well as insurance commission income within partnership programmes (+67.3% or RUB 409.8 million to RUB 1 018.4 million).

The trading result[8] remained almost unchanged as compared to the same period of 2012 amounting to RUB 3 222.5 million (an increase of 1.6% or RUB 49.9 million).

Administrative and other operating expenses by the end of the third quarter of 2013 amounted to RUB 16 584.4 million, an increase of 12.9% or RUB 1 895.9 million as compared to the same period of 2012, mainly due to higher staff costs (+13.4% or RUB 1 030.7 million to RUB 8 741.2 million) following the increase in the number of personnel. The cost optimisation policy pursued by the bank made it possible to decrease the cost-to-income ratio to 43.2% by the end of the third quarter of 2013 compared to 47.6% as of 31.12.2012 and 43.7% as of 30.09.2012.

BALANCE SHEET
The bank’s assets rose by 9.4% compared to the end of 2012 and amounted to RUB 697 050.2 million. The positive dynamics is mainly explained by an increase in loans and advances to customers (net of provisions) by 14.7% to RUB 422 384.2 million compared to the end of 2012, as well as an increase in the securities portfolio (+11.3% to RUB 56 336.1 million) due to a growth in corporate bonds and Eurobonds in the bank’s trading portfolio.

Liquid assets[9] rose slightly by 1.8% compared to the end of 2012 and amounted to RUB 225 591.2 million due to the increase in liquid securities[10] (+11.4% compared to the end of 2012). Thus, the share of liquid assets in total bank’s assets equalled to 32.4% as of 30.09.213, demonstrating a decrease by 2.4 percentage points compared to the figure as of 31.12.2012.

Loan portfolio (before deduction of provisions for loan impairment) amounted to RUB 443 094.2 million as of 30.09.2013, demonstrating an increase by 13.9% or RUB 53 963.6 million compared to the end of 2012 resulting from loan portfolio growth almost in all segments.

The retail loan portfolio rose by 37.4% compared to the end of 2012 reaching RUB 174 391.7 million. All products of retail portfolio demonstrated a positive performance: unsecured consumer loans (+56.5% or RUB 32 117.6 million), credit cards (+48.3% or RUB 3 685.9 million), car loans (+22.8% or RUB 6 480.6 million) and mortgage loans (+15.2% or RUB 5 171.7 million).

The loan portfolio of small and micro business increased by 30.0% to RUB 16 170.3 million compared to the end of 2012 resulting from the development of the product line and distribution channels.

The corporate loan portfolio rose by 1.1% due to an increase in the medium business loan portfolio up to RUB 14 965.1 million (+38.8% or RUB 4 184.0 million) resulting from the measures aimed at the development this segment.

The share of loans individually determined to be impaired in the gross loan portfolio continued to decrease and reached 4.6% by the end of the third quarter of 2013 (-0.9 percentage points compared to 31.12.2012) as a result of a reduction in the loans individually determined to be impaired and a growth of the loan portfolio.

During the first 9 months of 2013 there was the charge provision for loan impairment in the amount of RUB 1 364.1 million compared to charge of RUB 636.3 million in the same period of 2012 mainly due to the provisions on retail loans (RUB 1 183.5 million) as a result of the growth in the retail loan portfolio with its high quality maintained.

Balance sheet provisions for loan impairment remained almost unchanged (a slight decrease by 0.8%) compared to the end of 2012 amounting to RUB 20 710.0 million as of 30.09.2013. The loans individually determined to be impaired are fully covered by the provisions made by the bank: coverage ratio[11] was 102.1% by the end of the third quarter of 2013.

Customer accounts as of 30.09.2013 amounted to RUB 467 369.1 million, an increase of 16.9% or RUB 67 605.1 million compared to RUB 399 764.0 million as of 31.12.2012, due to higher current account balances across all segments.

Current/demand accounts and term deposits of individuals rose by 2.9% and 15.0%, respectively, totalling to RUB 254 042.4 million.

Current/settlement accounts of legal entities demonstrated positive performance, while term deposits in this segment decreased by 23.4% compared to the end of 2012. The above dynamics occurred due to the process of continuous replacement of expensive term deposits with cheaper current/settlement accounts.

The loan-to-deposit ratio amounted to 94.8% by the end of the third quarter of 2013 demonstrating a decrease by 2.5 percentage points compared to 97.3% as of the end of 2012, primarily due to the higher growth rate of customer accounts compared to loan portfolio growth.

Term borrowings from the parent bank amounted to RUB 38 966.4 million, a decrease by 4.5% or RUB 1 840.5 million compared to the end of 2012 resulting from contract repayments. Thus, the share of term borrowings from the parent bank in the bank’s total liabilities decreased by 1.0 percentage point from 7.7% as of 31.12.2012 to 6.7% as of 30.09.2013.

The bank’s equity was RUB 111 477.7 million as of 30.09 2013 demonstrating an increase of 3.7% or RUB 4 026.5 million compared to RUB 107 451.2 million at the end of 2012 due to the net profit obtained during 9 months of 2013 which compensated nearly the entire reduction in equity in the second quarter of 2013 due to the payment of dividends for 2012.

RETURN ON EQUITY AND CAPITAL ADEQUACY

Return on equity (ROE) before tax was 25.4% as of 30.09 2013, an increase of 0.5 percentage points compared to 30.09.2012. Return on equity (ROE) after tax rose by 0.7 percentage points compared to the same period of 2012 and reached 19.9%.

Total capital adequacy ratio according to Basel II equalled to 18.4% by the end of the 3rd quarter of 2013, demonstrating a decrease of 0.9 percentage points compared to 19.3% as of 31.12.2012 as a result of the payment of dividends for 2012 in the 2nd quarter of 2013 (EUR 263 166 985.98 at the exchange rate of RUB 43.0409 per EUR 1). The bank continues to maintain high quality of capital: the share of Tier-1 capital in total capital (Basel II) amounted to 98.3%.

Capital adequacy ratio (calculated in accordance with the Central Bank of the Russian Federation, N-1) was 12.6% as of 01.10.2013, demonstrating a decrease of 0.7 percentage points compared to 13.3% as of 01.01.2013 again following the payment of dividends for 2012.

ZAO Raiffeisenbank is a subsidiary of Raiffeisen Bank International AG. Raiffeisenbank ranks 12th among the Russian banks in terms of assets, based on Q3 2013 results (Interfax-CEA). According to the same Interfax-CEA data, Raiffeisenbank ranked 5th in terms of liabilities of individuals and 10th with regard to consumer lending.

Raiffeisen Bank International AG (RBI) regards both Austria, where it is a leading corporate and investment bank, and Central and Eastern Europe (CEE) as its home market. 15 markets of the region are covered by subsidiary banks, additionally the Group comprises numerous other financial service providers, for instance in the fields of leasing, asset management and mergers and acquisitions.

RBI is the only Austrian bank with a presence in both the world’s financial centres and in Asia, the group’s further geographical area of focus.

In total, around 59,000 employees service about 14.4 million customers through more than 3,000 business outlets, the great majority of which are located in CEE.

RBI is a fully-consolidated subsidiary of Raiffeisen Zentralbank Цsterreich AG (RZB). RZB indirectly owns around 78.5 per cent of the common stock, the remainder is in free float. RBI’s shares are listed on the Vienna Stock Exchange. RZB is the central institution of the Austrian Raiffeisen Banking Group, the country’s largest banking group, and serves as the head office of the entire RZB Group, including RBI
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[1] Calculated by subtracting from "Operating income" the following items: "Provisions for loan impairment", "Provisions for credit related commitments", "Provisions for investment securities held to maturity".
[2] Annualized.
[3] Annualized.
[4] In accordance with the methodology of the Central Bank of the Russian Federation.
[5] Calculated by subtracting from "Operating income" the following items: "Provisions for loan impairment", "Provisions for credit related commitments", "Provisions for investment securities held to maturity".
[6] Including net interest income from derivative financial instruments.
[7] Including net interest income from derivative financial instruments.
[8] Trading result includes: losses net of gains from trading securities, gains less losses from other securities at fair value through consolidated profit or loss, gains less losses/(losses, net of gains) from redemption of investment securities available for sale, gains less losses from trading in foreign currencies, unrealized gains less losses/(losses, net of gains) from derivative financial instruments, realized gains less losses from derivative financial instruments (excluding net interest income from derivative financial instruments), foreign exchange translation (losses, net of gains)/gains, net of losses, ineffectiveness from the hedge accounting.
[9] Liquid assets are calculated as the sum of the following items: cash and cash equivalents; due from other banks, repurchase receivables, trading securities, other securities at fair value through consolidated profit or loss, investment securities available for sale.
[10] Include repurchase receivables, trading securities, other securities at fair value through consolidated profit or loss, investment securities available for sale.
[11] Calculated as ratio of balance sheet provisions to amount of loans individually determined to be impaired