3M 2012 IFRS Results

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3M 2012 IFRS Results

  1. 1. Q1 2012 IFRS ResultsConsistent performance in low seasonConference CallMay 22, 2012
  2. 2. Q1 2012 HighlightsGood start of the year: NI of RUB 526 mln, up 65.9%YoY Assets remained flat at RUB 183 074 mln Share of IEA increased to 79% from 73% in Q4 2011 Loan portfolio b.p. stood at RUB 143 952 mln, up 4,8% QoQ vs 1,5% for sector Corporate portfolio rose to RUB 118 035 mln, up by 4.5% QoQ vs 0% for sector Retail portfolio was RUB 25 917mln, up by 6.4 % QoQ in line with sector +6.2% Client funds was RUB 142 969 mln down by 1.5% QoQ Loan/deposit ratio improved by 606 bps QoQ to 100.7% NPL ratio stood at 8.68%, coverage ratio for 1day+ overdue 107%  Net interest income was Rub 2,149, up 58% YoY  Net fees and commissions grew by 11.9% YoY to RUB 1,126 mln  NIM stood at 4.7% versus 3.2% in Q1 2011  Spread was 6.9%, up 171 bps YoY  ROE improved to 11.2% up from 7.5% in Q1 2011  Sufficient capital base (CAR: 13.4%, core Tier 1: 11.8% ), exceeding regulatory requirements 2
  3. 3. Financial highlights Q1’12 Q4’11 Q1’11 QoQ YoYInterest income 3 769 3 694 3 146 +2.0% +19.8%Interest expense (1 620) (1 481) (1 782) +9.4% -9.1% Fee and commission income 1 218 1 486 1 092 -18% +11.5% Fee and commission expense (92) (118) (86) -22% +6.9%Other operating income 127 178 169 -28.7 % -24.9%Total operating income 3 402 3 759 2 539 -9.5% +34.0%Operating expenses (2 042) (2 405) (1 798) -15.0% +13.6%Provisions (358) (658) (350) +2.3% -45.6%Provisions on non-core assets (313) (83) 5 +277% -Tax (163) (142) (79) +14.8% +106.3%Net profit 526 471 317 +11.7% +65.9% 3
  4. 4. NIM maintained at sufficient level supported bystronger interest income - Interest income keeps recovering on the back +19.8% of higher interest rates across the loan book +2.0% Interest Expenses Interest Interest Income and portfolio growth even though major part of loans were issued in the end of the period. Income and In Q1 2012 it was up 2% QoQ to Rub 3.8 bln. Interest 3.5 3.6 3.7 3.8 3.1 Expenses, - After recordly low levels achieved in Q4 2011 interest expenses started to increase reflecting RUB bln -1.8 -1.7 -1.6 -1.5 -1.6 higher interest rates on deposits introduced in H2 2011, cost of funding rose by 29 bps, still +9.4% remaining on a comfortable level of 4.0%. -9.1% Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 +148 bps NIM -22bps - Net interest margin on total average assets NIM stood at 4.7%, 23 bps lower than in Q4 due to outpacing growth of interest expenses. evolution 4.3% 4.6% 4.9% 4.7% Compared to the same period of 2011 NIM 3.2% showed significant improvement from 3.2%. Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 4
  5. 5. Stronger operating efficiency offsets seasonally lowrevenues Net interest income Net fees Other income Operating Expenses +34.0% - First quarter is normally characterized by -9.5% subdued economic activity resulting into lower Operating 0.1 0.1 0.2 0.1 non-interest income, while on a YoY basis net commission income grew by 11.9% driven by 0.2 1.4 1.1 Income and 1.0 1.2 1.3 settlement and cash operations and operations 2.0 2.2 2.1 with banking cards. On a year-on-year basis Expenses, 1.4 1.9 improved interest and non-interest revenues RUB bln -1.8 -2.1 -2.1 -2.4 -2.0 contributed to 34% hike in total operating income before provisions. -15.1% +13.6% - Operating expenses were down 15% QoQ due Q1’11 Q2’11 Q3’11 Q4’11 to seasonality and cost control. On a YoY basis Q1’12 administrative expenses were maintained at the same level, while 14% growth is mostly -10.8 pps attributed to accruement of bonuses to be paid Personnel expenses in the end of the year in Q1 2012. Other expenses 71% Cost to 66% 60% 64% 60% Income 42% 40% 36% 36% - Cost to income ratio declined by 395 bps QoQ 37% before and improved to 60% due to lower level of operating expenses. provisions,% 29% 26% 24% 28% 23% Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 5
  6. 6. Solid net income growth due to maintained operatingprofit coupled with lower level of provisioning +83.5% +0,4% - Operating profit was maintained at the level of Operating Operating profit before provisions Provisions Q4 2011 and totaled Rub 1.4 bln supported by tighth cost control. profit and 1.4 1.4 1.4 provisions, 0.7 1.1 - The bank charged Rub 358 mln to provisions for the quarter that lower than in the previous RUB bln -0.4 -0.6 -0.7 -0.7 -0.4 quarter but in line with the comparable quarter of 2011. However, general provisioning policy of the bank remains conservative. Coverage ratio remained sufficient at 107% for 1 day+ Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 overdue and 146% for 90 days+ overdue. +65.9% +11.7% Net profit - Bottom-line is gradually expanding for the 8th Net profit, quarter in a row. Thus, net profit for Q1 2012 surged by 66% YoY and 12% QoQ. RUB bln 0.526 0.411 0.471 0.395 0.317 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 6
  7. 7. Assets Reliable balance sheet… …enhances revenue generation capacityRUB bln Loans Securities Due from banks RUB bln 177 184 183 174 174 Cash and 79% 27 40 28 equivalents 73% 34 30 17 9 14 Due from 1.0 0.4 17 14 banks 14 21 23 25 9 16 19 Securities Retail loans 88 102 103 101 106 Corporate 124 131 loans Other assets 9 9 9 10 10 Q111 Q211 Q311 Q411 Q112 Q411 Q112IEA share comprises 79% of total assets LTD ratio at optimal levels RUB bln Cash and Other assets Gross loans Customer funds equivalents L/D ratio Due from other 5% banks 16% 98% 99% 101% 0% 92% 95% Securities 7% 14% 58% Corporate loan 126 Retail loan 137 133 135 137 138 145 144 143 portfolio 137 portfolio Q111 Q211 Q311 Q411 Q112 7
  8. 8. LoansHealthy growth with focus on SMEs… …and mortgages in retail… Rub bln SME Individuals Administrations Large corporates Credit cards Consumer and auto loans Mortgages +14,2% +48,3% +4,8% +6,4% 2.2 41.2 2.2 35.1 38.1 40.2 2.3 6.8 34.2 2.2 6.8 3.9 2.7 3.3 6.5 8.5 5.5 2.1 20.1 22.5 24.4 25.9 5.8 17.5 4.8 15.4 17.0 65.9 72.0 72.3 70.1 73.6 12.1 13.6 10.5 Q111 Q211 Q311 Q411 Q112 Q111 Q211 Q311 Q411 Q112… in Moscow oblast - key region of presence Breakdown by industry *as of 31.03.2012 Other *as of 31.03.2012 Transport Moscow Oblast (41%) 9% Agriculture 4% 6% 59,346 28% Manufacturing Construction 7% RUB RUB Other 3% 143,952 143,952 59,591 regions(41%) mln mln Wholesale & 23% 18% 25,015 retail trade 2% Individuals Moscow (18%) Administrations 8
  9. 9. Credit quality managementNPLs dynamics Annualized cost of risk Charges to provisions to NPLs, RUB mln * avg gross loans, QoQ Provisions, % of total portfolio NPLs, % of total portfolio Charges to provisions to avg gross loans, YtD 2.14% 1.78% 1.92% 9.26% 9.44% 9,25% 9.15% 9.09% 8.78% 8.31% 8.40% 8.70% 1.16% 1.48% 1.71% 1.77% 1.02% 7.70% 1.02% 11,061 11,030 11,488 12,490 1.16% 10,576 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012* NPL includes the whole principal of loans at least one day overdue either onprincipal or interest as well as not overdue loans with signs of impairmentNPLs categorization: mild rise in NPL ratio due to one large loan impairment SMEs Large corporates Retail RUB mln + Rub 721 mln new NPLs - Rub 227 mln recoveries + Rub 1,635 mln new NPLs + Rub 94 mln new NPLs - Rub 215 mln recoveries - Rub 94 mln recoveries 11.6% 11.3% 11.5% 7.1% 6.9% 11.0% 11.1% 8.9% 8.7% 6.2% 7.6% 5.3% 11.2% 11.1% 10.7% 7.0% 8.3% 6.2% 5.0% 10.4% 10.8% 4.4% 4.3% 5.6% 4.9% 8,263 4.6% 4.3% 3.4% 3.2% 8,195 8,025 8,464 3,400 4.6% 1,379 1,399 7,769 1,980 1,242 827 827 1,624 1,626 1,625 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 NPLs, RUB mln Provisions, % of total portfolio NPLs, % of total portfolio 915
  10. 10. Credit quality as of 31.03.2012 Large SMEs Mortgages Other Total % of total corporate retail loansGross loans, including 41,211 76,824 16,972 8,945 143,952 100.0% Provisions to Current loans 37,811 68,561 16,717 8,373 131,462 91,3% NPLs Ratio Provisions (1,459) (1,258) (245) (164) (3,126) 106.7% Past-due but not 0.15% impaired, of them - 52 63 86 201 Less than 90 days - 52 29 70 151 0.10% Over 90 days - - 34 16 50 0.05% Provisions to Provisions - - (37) (21) (58) 90 days+ NPLs Impaired, of them 3,400 8,211 192 486 12,289 8.5% 146% Less than 90 days 2,558 658 - 27 3,243 2.2% Over 90 days 842 7,553 192 459 9,046 6.3% Provisions (2,189) (7,306) (192) (450) (10,137)Total NPLs 3,400 8,263 255 572 12,490 8.7% Rescheduled Loans Provisions (3,648) (8,564) (474) (635) (13,321) 9.3% 37,563 68,260 16,498 8,310 130,631 4.2%Net Loans - the whole amount of loans with principal overdue for more than 1 day as well NPL - as loans with any delay in interest payments. 10
  11. 11. Liabilities and capital Funding base remains reliable… … with high share of interest-free fundingRUB bln 184 183 Retail deposits RUB bln 174 174 177 Corporate accounts Retail accounts Retail accounts Retail deposits Corporate deposits +4.45% 72 Corp. accounts 69 71 72 -1,5% 70 Corp. deposits 31 32 33 31 30 15 17 16 20 18 Securities issued 18 34% 15 17 16 20 31 30 32 33 31 Due to other banks 21 20 19 20 22 70 69 71 72 72 7 8 6 7 8 Other Liabilities 8 8 9 8 7 Subordinated 4 4 4 4 4 18 18 18 19 loans 17 21 20 19 20 22 EquityQ1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012Matched FX structure Capital position in line with requirements Data as of March 31, 2012 Tier 1 Tier 1 + Tier 2 CAR under CBR rules Assets Liabilities 14.1% (N1) 13.6% 13.4% 13.8% 13.4% 12.0% 11.8% 11.6% 11.9% 11.8% 11.6% USD USD 13% 11% 12% MIN RUB EUR 81% EUR RUB 7% 7% 80% Other Other 0% 0% Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 31.03.12 11
  12. 12. Fees and commissions Strong non-interest income based on long-term relations with customers Net fee income distribution Cards Other Cash transactions Settlements RUB mln Share of non-interest income in total operating +11.9% income b.p. vbank -17.7% 1,368 peer 1 1,256 37% 1,192 364 1,126 peer 2 1,006 335 348 24% 25% 292 325 20% peer 3 253 226 245 219 19% 196 337 291 310 256 230 Net fee margin 288 340 353 414 326 0.0% 1.0% 2.0% 3.0% 4.0% Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 * Vbank data as of 1Q’12, Peer1, Peer2, Peer 3, Peer 4 – FY2011 Non-interest income breakdown by segments Key points Q1 2012 Q4 2011 Despite subdued business activity in the beginning of the year net fee margin of the bank remained one of Financial Corporate the highest among peers and stood at 2.5% in Q1 2012 business Financial 4% 3% Net fee income delivered 11,9% growth versus Cards Cards 20% comparable period of 2011 on the back of higher fees 26% from cash and settlement operations as well as 53% 64% operations with banking cards 13% Retail business After enormous structure of non-interest income is 17%Retail business back to normal: corporate business contributed 53%, Corporate banking cards business delivered 25% and 17% was business delivered by retail segment 13
  13. 13. Questions and answers Elena Mironova Andrey Shalimov Deputy Head of IR Deputy Chairman of the Management +7 495 620 90 71 Board E.Mironova@voz.ru A.Shalimov@voz.ru investor@voz.ru http://www.vbank.ru/en/investors 16
  14. 14. DisclaimerSome of the information in this presentation may contain projections or other forward-looking statements regarding future events or thefuture financial performance of Bank Vozrozhdenie (the Bank). Such forward-looking statements are based on numerous assumptionsregarding the Bank’s present and future business strategies and the environment in which the Bank will operate in the future.The Bank cautions you that these statements are not guarantees of future performance and involve risks, uncertainties and other importantfactors that we cannot predict with certainty. Accordingly, our actual outcomes and results may differ materially from what we haveexpressed or forecasted in the forward-looking statements. These forward-looking statements speak only as at the date of this presentationand are subject to change without notice. We do not intend to update these statements to make them conform with actual results.The Bank is not responsible for statements and forward-looking statements including the following information:- assessment of the Bank’s future operating and financial results as well as forecasts of the present value of future cash flows and relatedfactors;- economic outlook and industry trends;- the Bank’s anticipated capital expenditures and plans relating to expansion of the Bank’s network and development of the new services;- the Bank’s expectations as to its position on the financial market and plans on development of the market segments within which theBank operates;- the Bank’s expectations as to regulatory changes and assessment of impact of regulatory initiatives on the Bank’s activity.Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materiallyfrom those expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include:- risks relating to changes in political, economic and social conditions in Russia as well as changes in global economic conditions;- risks related to Russian legislation, regulation and taxation;- risks relating to the Bank’s activity, including the achievement of the anticipated results, levels of profitability and growth, ability to createand meet demand for the Bank’s services including their promotion, and the ability of the Bank to remain competitive.Many of these factors are beyond the Bank’s ability to control and predict. Given these and other uncertainties the Bank cautions not toplace undue reliance on any of the forward-looking statements contained herein or otherwise.The Bank does not undertake any obligations to release publicly any revisions to these forward-looking statements to reflect events orcircumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required under applicable laws. 17

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