OREANDA-NEWS. In 2013, Bank Petrocommerce demonstrated sustainable development in all target business areas in line with its development strategy.

According to the management account data excluding events after the reporting date, in 2013, the Bank's assets increased by 6% to RUB 236.5 bln, which was driven, inter alia, by the loan portfolio growth. As at year-end, the Bank's loan portfolio amounted to RUB 156.3 bln, up by 5% yoy.

The growth of the Bank's retail loan portfolio outpaced the market average - 56% vs. 26%1, amounting to RUB 29.6 bln as at year-end, and was, first and foremost, underpinned by mortgage and consumer lending expansion. The quality of the loan portfolio improved considerably: the share of overdue loans decreased from 5.2% as at year-start 2013 to 3.4% as at 01.01.2014.

SME lending showed the most intensive growth - it experienced a 4.6-fold increase to RUB 9.8 bln, with the quality thereof being maintained at a very high level: overdue loans account for less than 0.05%.

The Bank's factoring portfolio augmented by 12% to RUB 18.9 bln.

The above trends contributed to changes in the loan book structure in compliance with the Bank's strategic development targets. The share of corporate clients fell from 71% to 60%, while the proportion of retail loan portfolio grew from 13% to 19%; the share of loans to SMEs went up from 1.4% to 6%; the share of factoring - by 1 p.p. to 12%.

In 2013, the Bank's funding structure did not experience any material changes. As earlier, its backbone (64% of the liabilities) is constituted by customer funding, which reduced by 7% to RUB 139 bln during the year. In 2013, a put option was exercised under three bond issues worth RUB 11 bln, and Bank Petrocommerce also made a new RUB 5 bln bond issue, which was considerably oversubscribed.

Positive trends in the Bank's business development and loan portfolio diversification boosted by the increasing share of retail and SME segments generating higher margins fuelled the growth of interest income by 21% to RUB 20.0 bln and fee & commission income by 38% to RUB 3.2 bln. Core revenues (net interest and net fee & commission income) increased by 32% to RUB 10.4 bln, or 85% of operating income (70% for 2012). Income from foreign exchange and securities trading amounted to RUB 1.5 bln (RUB 1.2 bln in 2012).

The Bank's liquidity indicators remain at a high level: as at 01.01.2014, instant liquidity ratio (N2) was 60.1%, current liquidity ratio (N3) - 75.7%, long-term liquidity ratio - 76.7%. The loan-to-deposit ratio was 113% as at 01.01.2014 (99% as at 01.01.2013).

The Bank is in full compliance with the capital adequacy requirements. As at 01.01.2014, capital adequacy ratio (N1) was 12.6% according to the Russian Accounting Standards; and starting from 01.01.2014, total capital adequacy ratio in accordance with Basel III stood at 14.2%.

In October 2013, the Bank's integration into Otkritie Financial Corporation was announced. Pursuant to the terms and conditions of the transaction, in December 2013, distressed debt worth RUB 19.5 bln was purchased, and additional provisions for loan impairment were created, which drove a negative financial result of RUB 7.1 bln as at year-end 2013. The Bank's shareholder - IFD Kapital - also made available two subordinated loans totalling RUB 10 bln, which will be used to ensure the growth of the Bank's business volumes.

“We intend to continue steady development of the Bank in all the areas, which performed well in 2013, while enhancement and expansion of cooperation with LUKOIL as its primary financial institution remain among the key objectives of the Bank”, - underscored President of Bank Petrocommerce Vladimir Rykunov. - At that, as President of LUKOIL Vagit Alekperov has mentioned earlier, the integration of Bank Petrocommerce into Otkritie FC will boost its capacities of financing LUKOIL's major investment projects and servicing the company's employees”.

According to Vladimir Rykunov, the Bank's dynamic growth and the shareholders' support will allow it to achieve a positive financial result as early as the first quarter 2014.