OREANDA-NEWS. CREDIT BANK OF MOSCOW announces its 2014 annual IFRS financials.

Total assets grew by 28.8% to RUB 584.8 bln in 2014, of which cash and cash equivalents represented 20.3% as a result of the Bank's conservative liquidity management policy amid the market turbulence in late 2014.

Gross loan portfolio (before provisions) stands at RUB 394.2 bln, 24.0% more than at 2013YE. The corporate loan book grew by 20.9% to RUB 265.9 bln, and the retail loan book by 31.1% to RUB 128.3 bln. The share of retail loans in the gross loan portfolio reached 32.5% compared to 30.8% as of 2013YE. Owing to the difficult macroeconomic situation, non-performing loans (NPL 90+) increased to 2.3%, whereas loan loss provisions amounted to 4.1% of the Bank's gross portfolio.

Customer accounts and deposits increased by 21.8% in 2014 to RUB 334.9 bln accounting for 63.8% of total liabilities. Corporate deposits grew by 22.1% to RUB 171.5 bln in 2014. Retail deposits increased by 21.5% to RUB 163.4 bln in the reporting period. The ratio of net loans to deposits remained at 112.9%, the same level as in 2013.

In December 2014, the Bank's total capital was increased by two subordinated loans totalling RUB 10 bln. A RUB 5 bln subordinated loan borrowed from the majority shareholder was subsequently converted into shareholders' equity in February 2015 and thus was factored into 2014YE tier 1 capital calculations.

The second 10.5-year RUB 5 bln subordinated loan was raised through the placement by CBOM Finance p.l.c., an Irish special purpose vehicle, of RUB 5 bln 16.5% subordinated Eurobond callable in 5.5 years.

Capital adequacy ratio calculated in accordance with Basel III grew from 14.8% to 15.8%. The Bank's total capital according to Basel III standards increased by 27.1% to RUB 90.3 bln. Tier I capital ratio rose in the reporting period from 10.2% to 10.5%.

Net income for 2014 fell to RUB 5.6 bln, a 37.3% drop compared to 2013. This decline was mainly due to the increase in loan loss provisions to RUB 11.6 bln resulting from the Bank's conservative approach to loan loss provisioning in the prevailing market conditions, and to the negative revaluation of the securities portfolio and losses from foreign exchange operations.

On the other hand, the Bank demonstrated growth of net interest income to RUB 25.8 bln and of net interest margin to 5.8% on the back of a 24.0% gross loan portfolio expansion and effective assets and liabilities management actions such as timely adjustment of loan pricing, firstly for corporate borrowers, following the repeated increases in the Bank of Russia's key rate during the year. As a result, the annual net interest income accounted for 91% of the operating income before provisions.

Fee and commission income increased by 26.3% compared to 2013 and reached RUB 9.1 bln. The key growth drivers included plastic card fees that soared by 2.4 times to RUB 1.6 bln and the documentary credit fees that rose by 48.7% to RUB1.7 bln.

Total operating income (before provisions) in 2014 grew by 15.0% to RUB 28.2 bln. Operating expense grew by 21.5% to RUB 9.5 bln on the back of the Bank's business expansion with the increasing number of the Bank's offices and employees. In particular, staff costs grew by 20.8% to RUB 4.3 bln, and administrative costs, including rental and advertising costs, by 33.6% to RUB 3.6 bln. Operational efficiency remained at a high level with the cost-to-income (CTI) ratio being 33.7%.