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News

02.08.2017

Net profit of SG Russia Group amounted to 3,8 bln rub in H1 2017 according to IFRS

«In the context of current market trends and in line with its business plan, SG Russia Group* showed increasing positive results in the first half of 2017. From Q2 2017 all main business lines of the Group are profitable.

Retail business line is developing at an accelerating mode. Over the reporting period, the growth in the retail loan volume was 30%, which is 8% higher than the market. The Group’s market share in retail loan production exceeded the pre-crisis level. Outstanding results have been achieved in gaining retail deposit portfolio, particularly with regards to current accounts of individuals, which have more than doubled in the last 12 months.

At the same time we gradually follow the structural changes aiming to increase quality of service, process efficiency and cost optimization. In 2017 we finalized migration of Rosbank ATM network to the ATM Host, as a result new ATM products and services have been implemented such as P2P transfers, Cash payments in ATM without cards, etc.

We launched IT architecture transformation program (IS Transformation) which is aimed to solve fundamental business needs: faster time to market, the availability of products of the Bank in all necessary channels of communication with the client (Multi-channel), the same principles of service and availability of information about the operations performed, regardless of when they were initiated (Omni-Channel), a complete covering of needed products, increasing the level of automation of processes, reduction of expenses maintenance of IT systems.

The Lean management programme is being implemented in all domains of the Group. By the end of H1 2017 more than 2000 employees in Moscow and regions started to use Lean instruments in their daily working activities. Implementation of Lean culture will help us to improve customer service quality, increase productivity as well as motivation and engagement of our employees», - commented Dmitry Olyunin, Rosbank CEO.

Retail business line

During H1 2017 SG Russia Group (further the “Group”) maintained its leading positions in retail business, ranked #3 for retail loans production volumes and portfolios, as well as significantly improved its ranking for retail deposits. As of the end of H1 2017 the Group is ranked #6 for CASA of individuals (ranked #10 as of the end of June 2016).

During H1 2017 the cash loan production volumes of the Group increased by more than 50%, car loans - by more than 60%, mortgages – by more than 20% as compared to last year. Overall the market share in production volumes increased from 3,5% to 3,7% during the last 12 months.

At the same time the Group continues to increase the retail deposit portfolio, focusing on retail current accounts. During the last 12 months the retail current accounts portfolio increased by more than 78% (as compared to the market +10%), in terms of market share increase is from 1,1% up to 1,6%.

Corporate business line

During H1 2017 Rosbank continued to expand its business with large corporates and MNCs, maintaining its market share in the context of tough market competition.

The largest syndicated facilities arranged in 2017:

  • syndicated loan facility in amount of USD 2 billion signed with one of the leaders in telecom industry, Rosbank and SG acted as mandated lead arranger and book runner;
  • syndicated loan facility in amount of USD 1,5 billion signed with one of the leaders metallurgical industry, Rosbank acted as original lender and passport bank.

During H1 2017 Rosbank DCM team in co-operation with SG acted as lead arrangers for a number of issuances by large corporates and banks raising funding for the total volume of more than RUB 90 billion.

Rosbank continuously improves its quality and enlarges its service range. During 2017 our clients started to use new services in Cash management: business card with overdraft, customs PAYHD cards, SWIFT FileAct, H2H with 1C.

Based on performance during 2016 Societe Generale Securities Services, Russia (Rosbank) was once again recognized as the «Best Securities Services Provider in Russia» in the annual ranking «World Best Securities Services», prepared by Global Finance magazine.

Loan portfolio

Rebound in retail lending started in H2 2016 and pursued in 2017, allowed the Group to stabilize its retail loan portfolio in Q1 2017. In Q2 2017 the retail loan portfolio of Group increased by 3% in line with the market.

The corporate loan portfolio of the Group increased by 1% from the beginning of 2017 (at the constant rate) in line with the market.

Deposit portfolio

During Q2 2017 the Group pursued the growth of clients deposits portfolio, which increased by 14% as compared to Q1 2017. From the beginning of 2017 the deposit portfolio of Group increased by 18% and during the last 12 months it grew by 22% (all at constant rate). During the last 12 months the Group outperforms the market as in retail as in corporate deposits collection. Retail deposit portfolio of the Group increased by 20% (market increased by 10%) and corporate deposit portfolio increased by 23% (market increased by 6%) all at constant rate.

Financial result

Net interest income of the Group in Q2 2017 amounted at RUB 9,1 billion, remaining at the level of Q1 2017. This dynamics is driven by shrinking of margins on corporate loans as well as decrease in rates on mortgages, which in turn is positively compensated by increase in retail loans and deposits.

 

Net fees and commissions in Q2 2017 amounted at RUB 2,2 billion increasing by 18% as compared to Q1 2017. The H1 2017 net fees and commissions amounted at RUB 4,2 billion increasing by 7% as compared to last year. The positive dynamics is mainly driven by rebound in retail lending and as a result increase in commissions paid by insurers (net fees and commissions earned by retail business line increased by 15% as compared to last year).

Q2 2017 OPEX amounted at RUB 8,7 billion and remained flat as compared to Q1 2017. H1 2017 OPEX amounted at RUB 17,4 billion increasing by 5% as compared to last year in line with the inflation.

H1 2017 NCR amounted at RUB 1,8 billion, which is significantly lower than NCR booked in H1 2016 at RUB 8,8 billion. Decrease in NCR is mainly driven by improved quality of retail loan portfolio, better recovery process as well as one off effect last year linked to USD mortgage restructuring. The quality of corporate loans remain high.

Ratings

The Analytical Credit Rating Agency (ACRA) assigned the highest credit rating at the AAA (RU) level to the banks of Societe Generale Group in Russia with a "stable" outlook.

Rosbank has a high level of assessment of its own creditworthiness due to a comfortable level of capital adequacy, an adequate risk-portfolio and an adequate position on liquidity and funding.

Rosbank and its subsidiaries maintain strong liquidity position and capital ratios that significantly exceed the mandatory standards set by the regulator. The international rating agencies Fitch Ratings and Moody's Investors Service confirmed the ratings of Rosbank, Rusfinance Bank and DeltaCredit in Q1 2017 at the level of the sovereign rating of the country.

*Rosbank, DeltaCredit, Rusfinance Bank and their subsidiaries

 

Appendixes

Key indicators of Statement of Financial position

 

Key indicators of Statement of Profit and Loss

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