OREANDA-NEWS. Alfa-Bank Russia, which includes Alfa-Bank and its subsidiaries, today reported audited IFRS financial results for the full year 2013.

Net profit of the Alfa-Bank Russia for the period amounted to USD 900 million (2012 - USD 829 million) which is the highest reported annual profit in the history of Alfa-Bank Russia. Return on average equity constituted 20.1%. Total equity increased by 16.0% to USD 4.8 billion after a USD 150 million dividends. Alfa-Bank Russia maintained a capital adequacy ratio under IFRS of 16.7% (December 31, 2012 - 15.6%).

Total operating profit before tax and provisions amounted to USD 3.1 billion (USD 2.2 billion at December 31, 2012), with provision charges for loan impairment increasing to USD 565 million in 2013 (2012 - USD 95 million). High profit was fueled by considerable growth in net interest income and fee and commission income reflecting excellent performance in all core business segments based on expanded customer base, portfolio growth combined with high quality of delivered services and operational efficiency.

The Alfa-Bank Russia net interest income increased by 33.5% to USD 2.3 billion in 2013 from USD 1.7 billion in 2012. The increase was mainly driven by growth in interest bearing assets, in particular retail loans. Net fee and commission income for 2013 increased by 34.5% and totaled USD 780 million compared with USD 580 million in 2012. Net income from settlement transactions has become the key growth driver constituting 63.6% of net fee and commission income in 2013. Net fee and commission income together with net interest income represented 99.0% of total operating profit before tax and provisions.

In the reporting period total assets of the Alfa-Bank Russia increased by 5.9% to USD 48.6 billion at December 31, 2013 from USD 45.9 billion at December 31, 2012. As at December 31, 2013 total gross corporate loans increased by 2.3% to USD 27.8 billion (USD 27.2 billion as at December 31, 2012), while total gross loans to individuals increased by 32.7% to USD 6.2 billion (USD 4.6 billion as at December 31, 2012), mostly represented by growth of credit card loans, personal installment loans and consumer loans. The overall provisioning rate increased to 4.3% as at December 31, 2013 from 4.0% as at December 31, 2012. Share of overdue loans (by one and more days) in total portfolio slightly increased from 1.6% as at December 31, 2012 to 2.1% as at December 31, 2013 mainly due to rise in retail overdue loans in line with the market trend. Provisions coverage of overdue loans amounted to 205% at 2013 which is well above market averages. Cost of risk as at December 31, 2013 comprised 1.72% compared with 0.35% as at December 31, 2012.

In the funding structure of the Alfa-Bank Russia customer accounts remained stable at USD 26.7 billion as at December 31, 2013. Meanwhile, retail customer accounts increased by 17.8% to USD 14.4 billion as at December 31, 2013. In 2013, the Alfa-Bank Russia issued ruble denominated bonds in the total amount of RUR 20 billion and placed debut ruble-denominated Eurobonds (LPNs) in the amount of RUR 10 billion. In April 2013, the Alfa-Bank Russia received a USD 350 million syndicated loan.

As at December 31, 2013, cash and cash equivalents accounted for 12% of total assets. In addition, the Alfa-Bank Russia holds investment portfolio of highly liquid debt securities available for sale and repo amounting to USD 2.1 billion. The Group has also access to secured and unsecured funding provided by the Central Bank of Russia.

The Alfa-Bank Russia has maintained its position as the top Russian private bank by total assets, total equity, customer accounts and loan portfolio, also being one of the most profitable banks on the market.

The Alfa-Bank Russia's full year 2013 IFRS accounts have been audited by PwC.