Rosbank Group consolidated results for 6 months 2016 as prepared in accordance with IFRS
In H1 2016 Rosbank Group* (further “the Group”) continued to improve its performance.
Thus, the net loss decreased to RUB 0.4 bln in H1 2016, showing a significant rebound in comparison with H2 2015 (net loss of RUB 3.3 bln). At the same time, in Q2 2016 the financial result went to the profit zone (RUB 105 mln), despite the additional expenses that the Group incurs as a result of the foreign currency mortgage portfolio refinancing. The size of these non-recurring items amounted to RUB 1.2 bln in H1 2016.
By the end of June 2016 as a result of the successful refinancing program implementation the total volume of foreign currency mortgages in the portfolio of the Group decreased by 60% compared to December 2014.
Despite the crisis market conditions, characterized by low consumption, high interest rates and rouble exchange rate volatility, the Group's activity in the Russian market largely recovered compared to 2015. In particular, an active customer base growth has resumed, the volume of lending to individuals is returning to pre-crisis levels, to legal entities – even exceeding it.
In these conditions Rosbank and its subsidiaries maintain a strong liquidity position and capital ratios that significantly exceed mandatory standards set by the regulator. International rating agencies Fitch Ratings and Moody's Investors Service confirmed the ratings of Rosbank, Rusfinance Bank and DeltaCredit Bank at the level of the sovereign rating in 2016.
Highlights in Retail business line
- The Group lending production volumes increased by 50% compared to 2015 in all major products (cash loans, mortgages and car loans).
- The Group demonstrates a higher growth than the market in consumer loan production. In H1 2016 production volumes are 22% higher than in H2 2015, as a result the Group strengthen its market positions by increasing its share to 2,5% for 6 month 2016.
- The Group keeps leading position both in mortgage and car loans among other things thanks to successfully originated loans under various state subsidy programs. During Q1 2016 DeltaCredit Bank is ranked Top-4 in mortgage production volumes (based on analytical center Rusipoteka), market share 3.5%. 5% of new cars sold during S1 2016 was financed by Rusfinance Bank.
- Steady growth of individuals liabilities is continuing. Retail deposits increased by more than 20%* during the last 12 months. Worth noting remarkable trend on sights accounts increased by cca +25%, which is fully in line with the Group’s target to develop its transactional business.
Highlights in Corporate business line
- Rosbank keeps increasing its penetration in largest corporate companies in Russia and MNCs.
- The main transactions with Tier1 clients during H1 2016 were as follows:
- PJSC Rosbank and Societe Generale acted as one of the Mandated Lead Arrangers of the pre-export finance facility for SUEK Group in total amount exceeding US$ 1 bln with an option to increase the amount up to US$ 1.3 bln.
- Rosbank together with Societe Generale acted as one of the Coordinating Mandated Lead Arrangers and Bookrunners of the loan agreement for Uralkali in the amount of US$1.2 bln with 16 international banks.
- Societe Generale, PJSC Rosbank acted as Coordinating Mandated Lead Arrangers, while PJSC Rosbank acted as Passport Banks of PhosAgro debut pre-export financing with a syndicate of international banks for a total amount of USD 250 mln, with a four-year maturity.
- Rosbank has continued to gain momentum: as of Q2 2016, Rosbank entered Top-4 investment banks in Cbonds arrangers’ league table for Russian bonds issues (Rosbank’s market share is above 8%).
- Rosbank Factoring was ranked 9th in the rating of the best factoring companies for H1 2016 published by the Expert RA Agency (RAEX). The company's business volume increased by 17% comparing to 2015.
- Solid dynamics shows Rosbank Leasing - a portfolio of deals increased by 30% since June 2015.
In H1 2016 the Group's total loan portfolio decreased by 4% (excluding forex effect) compared to end-December 2015. The reduction is caused by further decline in the retail loan portfolio (-7% excluding forex effect). At the same time the Group corporate loan portfolio increased slightly (by 1%). In addition there was a change in portfolio structure: the share of foreign currency loans decreased (by 22%); the share of rouble loans increased (by 22%). In general these changes had a positive impact on the Group interest margins.
First of all this decrease is caused by the seasonal adjustment. During the year the portfolio was stable. The retail portfolio reduction by 12% (compared to June 2015), due to the persistent excess of the rate of amortization of the portfolio volume comparing to the volume of new disbursements, more than compensated by outrunning growth of corporate portfolio, which increased by 18%, mainly due to the growth of the rouble loans volume (an increase of 33%).
In the H1 2016 and during the last 12 months, the Group's deposit portfolio showed a consistent trend, decreasing by 7% and 6% (excluding forex effect), respectively, mainly due to the initiated measures of the Group's portfolio structure optimization. As a result of these actions the corporate deposit portfolio volume in foreign currency significantly reduced by more than 15% in H1 2016 and by 30% over the last year. At the same time deposit portfolio of individuals has demonstrated a steady growth of 5% in H1 2016 and by 9% during the last 12 months, mainly due to the increase of the rouble deposits share (by 10% in H1 2016 and by 17% in the last 12 months).
Net interest income of the Group during H1 2016 amounted to RUB 19.3 bln increasing by 11% compared to H1 2015. The positive trend is mainly explained by improved margins following decrease in funding costs.
Net fees and commissions during H1 2016 amounted to RUB 3.9 bln increasing by 21% compared to H1 2015 mainly thanks to improved production volumes in retail lending and as a result, increased revenues from partnerships with insurance companies. Commissions earned by retail platform increased by 26% as compared to H1 2015. At the same time corporate business line showed a positive trend in commission income 8% as a result of development of cash management services and trade finance platform.
Operating expenses of the Group in H1 2016 amounted to RUB 16.5 bln and decreased compared to prior year by 3%, despite a backdrop of high inflation. This is the result of various cost optimization measures implemented by the Group: further streamlining of retail network as well as planned staff reduction by 20% vs H1 2015.
Net cost of risk of the Group in H1 2016 amounted to RUB 8.8 bln and decreased by 22% compared to H1 2015. The quality of corporate portfolio remains sound. Net cost of risk reduction was mainly gained by retail portfolio recovering as well as improved soft and hard collection process.
Key financial elements and ratios of statement of financial position
Key financial elements and ratios of statement of profit or loss
*Rosbank, DeltaCredit Bank, Rusfinance Bank and their subsidiaries