OREANDA-NEWS. July 03, 2015. The Bank’s equity amounted to RUB 11.4 billion as of 31 March 2015, up 7% versus RUB 10.7 billion as of 31 December 2014, mainly due to an increase in retained earnings by 9% compared with the beginning of the year. Total capital adequacy ratio under Basel Capital Accord was 16.4% and tier 1 CAR - 15.9%.

Total assets were RUB 79.3 billion as of 31 March 2015.

Operating income totaled to RUB 1.4 billion in 1Q 2015. The main components of operating income were net interest income (RUB 756 million), net foreign exchange trading income (RUB 310 million), and net income from financial assets available for sale (RUB 303 million), net fee and commission income (RUB 190 million). The operating income increase was 10% compared to the same period last year. Interest income amounted to RUB 2.5 billion in 1Q 2015, up 11% compared to 1Q 2014. Net interest income decreased by 36% compared to 1Q 2014, due to interest expense growth in terms of unfavorable external conditions.

Operating expenses totaled to RUB 0.7 billion in 1Q 2015, decreased by 36% versus RUB 1.1 billion in 1Q 2014. A significant decrease in operating expenses was due to the reduction in charge for impairment losses (RUB 40.6 million in 1Q 2015 versus RUB 515.5 million in 1Q 2014). Additional provision formation in 2014 was due to the increase of overdue loans in the consumer loans portfolio issued in 2013. Owing to a mature retail loan portfolio in 1Q 2015, it had slightly additional provisioning. The factors contributed to a decrease of cost of risk to 0.3% in 1Q 2015 versus 4% in 1Q 2014.

Net profit amounted to RUB 582 million in 1Q 2015, increasing approximately four times versus RUB 141 million in 1Q 2014.

Cost to Income Ratio improved, decreased to 47.4% in 1Q 2015 versus 47.6% in 1Q 2014.

Return on equity (ROE) reached 21.1% (annualized) in 1Q 2015, up 15.7 pp versus 5.4% in 1Q 2014.

Net interest margin was 4.1% in 1Q 2015, decreased from 6.3% in 1Q 2014 due to the reduction in net interest income.

Gross loan portfolio amounted to RUB 48.9 billion in 1Q 2015, 5% decrease compared to 2014 including the reason of retail portfolio reduction in terms of unfavorable external conditions.

SME loans totaled to RUB 31.6 billion, amounted to 65% of total loan portfolio.

Retail portfolio was RUB 17.3 billion in 1Q 2015, 7% decrease compared to 2014.

Net loans comprised 58% of total assets in 1Q 2015.

The dynamics of loan portfolio quality indicators was due to macroeconomic trends. NPL ratio (90+ days overdue) was 7% 1Q 2015 compared to 6.2% in 2014.

Total liabilities were RUB 67.9 billion as of 31 March 2015. Current accounts and deposits from customers slightly decreased to RUB 42 billion versus RUB 44 billion as of 31 December 2014 due to the seasonality factor of the federal budget execution. Amounts payable under repurchase agreements amounted to RUB 14.7 billion versus RUB 10.5 billion as of 31 December 2014. Own securities issued declined to RUB 6.3 billion compared to RUB 8.5 billion as of 31 December 2014 as a result of the settlement of certain put options held by the group in February, 2015.

Current accounts and deposits from customers amounted to 62% of total liabilities as of 31 March 2015. Retail accounts and deposits increased to RUB 26.3 billion as of 31 March 2015 versus RUB 25.7 billion as of 31 December 2014. Loan to deposit ratio was 108% as of 31 March 2015 versus 109% in 2014.

The Bank continues to operate in 21 key economic regions of Russia with 56 outlets branch network as of 31 March 2015.

Pavel Voznesenskiy, Deputy Chairman of the Executive Board, commented:

“In the context of external environment deterioration, a sharp interest rates increase, as well as economic activity slowdown of enterprises and individuals, the Bank demonstrated healthy trends in key profitability and efficiency ratios, maintaining a good level of capitalization in 1Q 2015. LOCKO-Bank continues to work on retaining loan portfolio quality in key businesses - SME and retail lending, participating in state lending support programs of these sectors and successfully offering new high-tech products and services to their customers”.