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FY 2012 IFRS Results

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FY 2012 IFRS Results

  1. 1. FY 2012 IFRS ResultsSteady growth despite economy decelerationConference CallMarch 27, 2013
  2. 2. Assets and liabilities Reliable assets structure… …supported by customer-based fundingRUB bln RUB bln Retail deposits 209 209 194 195 Cash and 195 Retail accounts 184 183 equivalents 184 194 43 183 Corp. accounts 34 35 Due from 40 29 banks 81 0.4 0.4 6 77 78 Corp. deposits 0.4 12 12 8 72 1 14 72 9 Securities 27 30 32 Securities issued 23 25 21 Retail 20 18 19 18 Due to other banks loans 30 36 31 32 Other liabilities 33 111 Corporate 101 106 107 110 25 26 loans 20 22 24 Subordinated 8 8 7 loans Other 7 84 78 7 8 8 4 4 5 6 Equity assets 18 19 20 20 21 10 10 10 10 10 Q411 Q112 Q212 Q312 Q412 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Loan book growth… …with retail outperforming SME Administrations Large corporates Individuals RUB bln Credit cards Consumer and auto loans Mortgages RUB bln +13,8% +34,8% +3,2% +4,7% 2.1 28 31 33 2.1 24 26 2.1 8.5 2.2 8.4 2.2 7.6 41 43 41 45 40 6.8 6.8 3 3 2 2 3 20.8 22.3 78 17.0 18.5 70 74 77 77 15.4 Q411 Q112 Q212 Q312 Q412 Q411 Q112 Q212 Q312 Q412 2
  3. 3. Risk management Capital position enhanced by subordination Maturity gap up to 5% of the balance RUB bln Assets Tier 1 Tier 1 + Tier 2 Including RUB 1 14,9% bln of subord 80 Liabilities 13.8% 14.2% 3rd tranche 13.4% 13.2% 70 12.3% 12,5% 11.9% 11.8% 12.1% 11.6% 11.9% 60 50 11% MIN 40 30 20 10 0 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 28.02.13 Demand and less than 1From 1 to 6 months month From 6 to 12 months More than 1 year CAR (N1) under CBR rules FX structure Interest rate risk Assets Liabilities RUB bln RUB bln Interest-earning assets Interest-bearing liabilities 80Roubles Roubles 70 60 14 50 28 82% 18% FX 81% 19% FX 40 20 30 4 20 1 3 10 Loans Deposits 0 Due from banks&Securities&Cash Due to banks&Securities Demand and less From 1 to From 6 to More than 1 year Other assets Other liabilities than 1 month 6 months 12 months 3
  4. 4. Credit quality management NPLs dynamics Annualized cost of risk NPLs, RUB mln * Charges to provisions to avg Provisions, % of total portfolio gross loans, QoQ NPLs, % of total portfolio Charges to provisions to avg gross loans, YtD 2.86% 9.44% 9.25% 9.09% 9.52% 9.40% 2.24% 9.41% 1.92% 8.68% 9.02% 1.83% 7.70% 8.08% 1.02% 2.06% 1.77% 1.65% 1.17% 1.02% 10,576 12,490 12,297 14,251 14,102 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 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 impairment NPLs categorization: absolute improvement in SME and retail SMEs + Rub 275 mln new NPLs Large corporates Retail - Rub 351 mln recoveries No changes + Rub 111 mln new NPLs 11.5% 11.1% - Rub 184 mln recoveries 10.4% 10.5% 10.5% 13.2% 12.2% 10.7% 10.8% 4.4% 9.9% 8.9% 10.1% 12.2% 4.3% 10.0% 9.8% 11.9% 3.6% 3.5% 3.5% 8.7% 8.3% 8.0% 3.4% 3.2% 3.1% 2.7% 4.9% 2.7% 7,769 8,263 8,120 7,841 7,765 1,980 3,400 3,400 5,445 5,445 827 827 777 965 892 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 NPLs, RUB mln Provisions, % of total portfolio NPLs, % of total portfolio 415
  5. 5. Credit quality RUB mln Large SMEs Mortgages Other Total as of 31.12.2012 corporates retailGross loans, including Provisions to 44 587 78 928 22 302 10 548 156 365 NPLs Ratio Current loans 87,8% 90,2% 98,3% 95,2% 91,0% 104% Past-due but not impaired, of them - 0,2% 1,1% 0,8% 0,3% Less than 90 days - 0,2% 0,2% 0,7% 0,2% Over 90 days - - 0,9% 0,1% 0,1% Provisions to 90 days+ Impaired, of them 12,2% 9,7% 0,6% 4,0% 8,7% NPLs Less than 90 days - 0,1% - 0,3% 0,1% 107% Over 90 days 12,2% 9,6% 0,6% 3,6% 8,7%Total NPLs 12,2% 9,8% 1,7% 4,8% 9,0% Provisions -11,9% -10,5% -2,7% -5,2% -9,4% Rescheduled LoansNet Loans 39 296 70 671 21 691 10 004 141 662 5.6% the whole amount of loans with principal overdue for more than 1 day as well NPL - as loans with any delay in interest payments. 5
  6. 6. Geographical diversificationCorporate loans Retail deposits (without debit card accounts) South regions Moscow Oblast Moscow Oblast South regions 10% North-West regions 21% 6% 37% Other regions RUB 4% RUB 123,515 56% 81,014 mln 13% mln North-West regions 24% Moscow 15% 14% Moscow Other regionsCorporate deposits Retail loans South regions South regionsMoscow Oblast Moscow Oblast North-West regions 8% 9% 34% 3% 11% Other regions RUB RUB 48% 25,896 28% 32,850 mln North-West regions mln 29% Moscow 26% 4% Moscow Other regions 6
  7. 7. Financial highlights RUB mln FY’12 FY’11 Q4’12 Q3’12Net interest income 9 058 7 456 2 394 2 253 +21%Net fee and commission income 5 061 4 822 1 324 1 320 +5%Total operating income b.p. 14 793 12 889 3 743 3 875 +15%Operating expenses (8 652) (8 353) (2 421) (2 051) +4%Charges to Provisions (2 722) (2 304) (451) (1 083) +18%Net profit 2 331 1 594 544 583 +46% 7
  8. 8. Revenues from core business Operating income up… …driven mostly by interest income Net interest income Net fees RUB bln Interest Expenses RUB bln Other income Interest Income 0.3 0,03 0.2 +14.8% 0.1 +4.6% 0.7 0.6 1.3 1.3 1.3 1.1 4.1 4.3 4.5 5.1 3.8 4.8 16.6 14.0 2.1 2.3 2.3 2.4 -1.6 -1.9 -2.0 -2.1 9.1 7.5 -6.5 -7.6 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2012 2011 2012 2011 2012 Net fee income breakdown Segment structure of core revenues Cards Other Cash transactions Settlements RUB mln Interest income Non-interest income -3.2% +0.3% Corporate Other Corporate 1,368 1,320 1,324 business business 1,291 364 1,126 5% 360 364 391 325 71% Cards 253 250 265 224 Other 27% 5% 52% 219 337 3% 304 300 301 Cards 256 414 326 377 391 408 21% 16% Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Retail business Retail business 8
  9. 9. NIM gains on repricing of loans and depositsLoan yields surged forward… …outpacing cost of deposits Yields on corporate loans Yields on retail loans Corporate term deposits Yields on securities Retail term deposits Current accounts 15.7% 14.9% 14.9% 15.4% 14.8% 7.2% 7.6% 5.7% 6.3% 6.7% 10.8% 10.9% 11.3% 10.3% 10.3% 6.1% 6.4% 5.1% 5.3% 5.8% 6.1% 6.4% 5.3% 5.3% 3.4% 0.2% 0.1% 0.1% 0.1% 0.1% Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012Spread dynamics NIM decomposition Interest Spread Loans Deposits Other Base effect +46 bps Yield on earning assets (net) Cost of funds -0,10% +0,44% -0,05% -0,18% 11.2% 11.4% 11.7% 10.7% 10,9% 7.1% 6.9% 6.7% 6.7% 7.1% 4.7% 4.3% 4.68% 4.80% 4.64% 4.74% 4.7% 4.6% 4.0% 4.4% 3.7% Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2012 2011 2012 9
  10. 10. Cost efficiency in focus Operating expenses breakdown Staff expenses composition Personnel expenses RUB mln Administrative expenses Salary Benefits Bonuses Rent & Costs related to premises and equipment Other +0.7% +18% 14% 9% 10% 27% 420 458 50% 339 336 325 49% 54% 50% 440 397 300 351 335 51% 193 191 209 13% 145 155 37% 38% 37% 40% 1,352 1,258 1,260 1,236 1,357 22% Top Operational Managers Specialists and management management service Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Operating efficiency dynamics CIR on way to improvement Operating expenses RUB bln Operating income before provisions Cost/Income70.0% 64.0% 64.7% 7.0 72.5% 60.0% 56.7% 6.0 64.8%60.0% 52.9% 5.0 58.5%50.0% 4.0 48.7% 50.0% 3.040.0% 3.8 3.4 3.8 3.9 3.7 2.0 Mid-term30.0% 1.0 target20.0% 0.0 -2.0 -2.4 -2.1 -2.1 -2.4 -1.010.0% -2.00.0% -3.0 2009 2010 2011 2012 Q411 Q112 Q212 Q312 Q412 10
  11. 11. Earnings generation capacityOperating profit Net profit developmentOperating profit before provisions and taxes RUB bln RUB blnProvisions +46% +35% 1.6 1.8 6.1 1.4 1.3 4.5 0.7 -0.4 2.3 0.5 0.6 0.5 -0.8 -0.5 -1.1 1.6 -2.3 -2.7 Q112 Q212 Q312 Q412 Q112 Q212 Q312 Q412 2011 2012 2011 2012ROE, % ROA, % 23.3% Mid-term target: back to 20% Mid-term target: 1.5% – 2% 11.9% 2.45% 9.1% 7.8% 1.21% 3.5% 0.88% 0.91% 0.38% 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 11
  12. 12. Key takeaways of 2012 & 2013 plans Lower market competition Limited SME loan demand due to macro expectations Strong growth in mortgages 2012 highlights Stable inflow of deposits with moderate interest rates policy Tier 2 strengthening with subordinated deposit Improvement of cost-to-income GDP growth 3,5% Base case Oil price > $100.00 macro Inflation 6% scenario USD/RUB 32 EUR/RUB 42 Moderate growth 12 - 14% Margin protection at 4,5% 2013 expectations Close monitoring of credit quality with adequate provisioning Interest rates - slight growth on both IEA/IBL Control over operating expenses & operating efficiency project going forward 12
  13. 13. Questions and answers Andrey Shalimov Julia Vinogradova Elena Mironova Deputy Chairman of Advisor to the Chairman of Deputy Head of IR the Management Board the Management Board +7 495 620 90 71 A.Shalimov@voz.ru Yu.Vinogradova@voz.ru E.Mironova@voz.ru investor@voz.ru http://www.vbank.ru/en/investors 13
  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. 14

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