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Investor presentation H1 2014
- The document appears to be a financial report from a bank providing quarterly results for Q2 2014. - Key highlights include stable assets, diversified funding sources replacing market funding, loan portfolio down slightly, and improving customer deposits and funds. - Credit quality was also maintained with non-performing loans down and provisions sufficient to cover losses. - Net profit increased slightly from the previous quarter due to stable net interest income and fees.
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Investor presentation H1 2014
- 1. H1 2014 IFRSResults Time-proved client loyalty Conference Call August 27, 2014
- 2. 2 7,7 7,4 2,7 1,4 5,5 1,6 15,9 10,4 8,5% 5,6% Q1 2014 Q2 2014 Loans from CBR under repo agreements Interbank funding with maturity less than 1 year Interbank funding with maturity over than 1 year 13 13 13 12 13 150 155 156 158 152 12 14 12 7 12 6,4 1,9 1 1 1 1 1 40 33 29 26 31 216 217 211 211 210 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Cash and equivalents Due from banks Invest. securities pledged under repos Securities Net loans Other assets 8,5% 5,6% Assets and liabilities Assets stable across the year Diversified funding structure Market funding replaced by customer resources L/D ratio down to targeted range RUB bln RUB bln RUB bln 167 173 168 172 166 169 171 162 153 158 99% 102% 104% 112% 105% Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Gross loans Customer funds L/D 21 22 22 23 23 7 5 4 4 3 1 1 4 1 1 9 9 10 14 14 169 171 162 153 158 5,5 1,6 8 9 9 10 9 216 217 211 211 210 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Due to other banks CBR funds under repos Client funds Securities issued Other liabilities Subordinated loans Equity
- 3. 3 20 18 19 16 18 87 91 87 89 93 107 109 106 104 110 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Retail deposits Retail accounts 26,0 24,9 24,3 19,8 20,1 35,8 36,8 31,2 28,8 27,7 62 62 55 49 48 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Corporate accounts Corporate deposits Customer funds Retail funds saw a strong inflow Rebound of corporate deposits RUB bln -1.7% +5.6% RUB bln 53 50 47 46 42 42 45 4 5 6 5 5 7 5 57 54 54 51 47 49 50 Dec Jan Feb Mar Apr May Jun RUB Corporate FX Corporate Corporate funds monthly dynamics (RAS) 79 77 76 75 79 80 83 25 27 29 28 28 27 26 105 104 105 103 108 107 109 Dec Jan Feb Mar Apr May Jun RUB Retail FX Retail Retail funds monthly dynamics (RAS) 24% 10%
- 4. 4 Loan portfolio Loan portfolio developments Industry diversification – whom we limit? RUB bln 51 52 51 52 50 79 81 74 76 72 25 28 30 31 31 12 13 13 13 13 166,9 173,2 168,2 171,6 166,1 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Large corporates SMEs Mortgages Consumer, car loans, and cards As of June 30, 2014 Rub 122,1 billion SMEs dynamics decomposition *Loan portfolio before provisions for impairment -3.2% 51,6 49,9 Q1 2014 Q2 2014 Large corporates dynamics decomposition 76,2 72,2 Q1 2014 Q2 2014 RUB bln RUB bln Loans to new clients Loans to existing clients Recoveries Migration between SMEs and large corps +1,1 +4,3 -9,9 +0,5 Loans to new clients Loans to existing clients Recoveries Migration between SMEs and large corps 0,0 +0,5 -1,7 -0,5 36% 0% 26% 1% 11% 5% 4% 8% 9% Construction (+0,1%) Manufacturing (-0,7%) Agriculture (-0,3%) Wholesale & retail trade (+1,0%) Administrations (-0,2%) Other (+0,3%) Transport (+0,1%) Real estate (-0,1%)
- 5. 5 1 102 1 810 1 350 1 730 1 863 3,7% 3,2% 1,9% 2,0% 2,2% 3,00% 4,47% 3,17% 3,94% 4,23%* Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Retail Credit quality management 15 2,30% 2,10% 0,57% 3,11% 3,12% 2,20% 2,10% 2,30% 2,90% 2,79% Q2 2014 Q1 2014 Q4 2013 Q3 2013 Q2 2013 Charges to provisions to avg gross loans, QoQ Charges to provisions to avg gross loans, YtD +Rub 744 mln new NPLs -Rub 234 mln recoveries -Rub 73 write-offs +Rub 1 123 mln new NPLs -Rub 990 mln recoveries no write-offs 17 270 18 616 12 385 13 129 13 699 10,13% 10,46% 7,36% 7,70% 8,53% 10,35% 10,75% 7,36% 7,65% 8,25% Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 NPLs, Rub mln Provisions, % of total portfolio NPLs, % of total portfolio * no new NPLs no recoveries no write-offs NPLs categorization Annualized cost of risk NPLs dynamics* * NPL includes the whole principal of loans at least one day overdue either on principal or interest as well as not overdue loans with signs of impairment *2,2% of which is overdue less than 30 days 7 939 8 671 3 518 3 882 4 319 10,6% 11,1% 5,3% 5,3% 6,0% 10,0% 10,8% 4,7% 5,1% 6,0% Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 SMEs 8 229 8 135 7 517 7 517 7 517 14,1% 15,2% 14,8% 16,1% 17,8% 16,2% 15,6% 14,6% 14,6% 15,1% Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Large corporates NPLs, Rub mln Provisions, % of total portfolio NPLs, % of total portfolio
- 6. 6 Credit quality As of June 30, 2014 Large corporates SMEs Mortgages Other retail Total Gross loans, including 49,898 72,192 30,722 13,336 166,148 Current loans 84.9% 94.0% 97.1% 92.7% 91.8% Past-due but not impaired, including - 0.5% 2.4% 2.5% 0.8% Less than 90 days - 0.3% 2.2% 2.5% 0.7% Over 90 days - 0.2% 0.2% 0.0% 0.1% Impaired, including 15.1% 5.5% 0.5% 4.8% 7.4% Less than 90 days - 0.5% - 0.6% 0.3% Over 90 days 15.1% 5.0% 0.5% 4.2% 7.1% Total NPLs 15.1% 6.0% 2.9% 7.3% 8.2% Provisions -17.7% -6.0% -1.0% -4.9% -8.5% Net Loans 41,057 67,835 30,403 12,687 151,982 Provisions to NPLs Ratio 103.4% Provisions to 90 days+ NPLs 117.4% Rescheduled Loans 6.4% NPL - the whole amount of loans with principal overdue for more than 1 day as well as loans with any delay in interest payments. RUB mln
- 7. 7 Financial highlights As of June 30, 2014 2Q14 1Q14 QoQ 1H14 1H13 YoY Interest income 4,949 5,063 -2.3% 10,012 9,097 +10.1% Interest expense (2,554) (2,472) +3.3% (5,026) (4,680) +7.4% Fee and commission income 1,149 1,101 +4.4% 2,250 2,587 -13.0% Fee and commission expense (172) (185) -7.0% (357) (265) +34.7% Other operating income 270 138 +95.7% 408 418 -2.4% Total operating income b.p. 3,642 3,645 -0.1% 7,287 7,157 +1.8% Operating expense (2,178) (2,187) -0.4% (4,365) (4,226) +3.3% Provisions for loan impairment (973) (893) +9.0% (1,866) (2,275) -18.0% Provisions for impairment of other assets 46 (9) - 37 2 x18.5 Taxation (106) (128) -17.2% (234) (137) +70.8% Net profit 431 428 +0.7% 859 521 +64.9% RUB mln
- 8. 8 4,2% 4,5% 4,9% 4,9% 4,6% Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 NIM in line with target despite funding costs growth Interest income & expense breakdowns NIM decomposition Spread Interest rates 3,3 3,1 1,6 1,7 0,2 0,2 -1,5 -1,6 -0,4 -0,4 -0,5 -0,6 2,6 2,4 Q1'14 Q2'14 Int. income from corp. loans Int. income from retail loans Other int. income Int. expense from retail deposits Int. expense from corp.deposits Other int. expense RUB bln 6,4% 6,7% 6,9% 6,6% 6,2% 11,5% 11,8% 11,8% 11,9% 11,7% 5,0% 5,1% 4,9% 5,3% 5,5% Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Spread (net) Yields on earning assets (net) Cost of funds -0,31% -0,13% +0,07% +0,02% Loans Deposits Other Base effect 7,7% 7,6% 6,7% 7,3% 8,1% 6,5% 6,8% 6,7% 7,0% 7,0% 10,9% 11,2% 11,4% 11,4% 11,3% 15,0% 15,3% 15,3% 15,4% 15,4% Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Corporate term deposits Retail term deposits Yields on corporate loans Yields on retail loans
- 9. 9 8 11 14 17 20 23 1 215 1 247 940 916 977 1 137 1 145 1 169 2Q 2013 3Q 2013 4Q 2013 1Q 2014 2Q 2014 Net fee income Net fee income with corrected gradual accruals of one-off reclass 2,2 2,4 2,6 2,6 2,4 1,2 1,2 0,9 0,9 1,0 0,22 0,14 0,10 0,14 0,27 3,7 3,8 3,7 3,6 3,6 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Net interest income Net fees Other income Operating results …supported operating income on a stable level …amid seasonally high business activity… Fee income dynamics… …with all components growing in Q2.. RUB bln RUB mln -0.1% +6.7% -0.7% -14.1% 238 241 274 295 219 225 185 216 916 977 1Q 2014 2Q 2014 Settlements Cards Cash transactions Other RUB mln 2012 2013 2014 H1 2012 86.8 H1 2013 90.0 H1 2014 91.6 Balances on debit card accounts, RUB bln Credit turnover of card accounts, RUB bln
- 10. 10 1 321 1 279 1 360 1 300 1 307 328 336 404 436 329 176 181 203 170 194 310 338 450 281 348 2 135 2 134 2 417 2 187 2 178 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Rent and costs relating to premises, equipment and depreciation of intangible assets Taxes other than income tax and contributions to the State Deposit Insurance Agency Administrative and other expenses Staff costs Costs Operating model optimization project development Costs structure C/I ratio RUB mln -0,4% 58,2% 56,0% 65,6% 60,0% 59,8% Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Cost to Income Ratio, % Stage Centralisation: Internet-Bank client support service Work with orders and requests of Federal Tax Service Requests - done Orders - Dec14 AML/FT control Moscow region Controller for the service of regular payments for the mobile and internet-bank FRAUD-analysis and payment controller function Automation of Internet-client payment processing on Rub payments Optimisation of individuals’ incoming payments processing Uniting cashier and teller functions Moscow region Work with orders and requests of Federal Bailiff Service Requests - done Orders - Oct14 Stage HR documentation handling Moscow region – Dec14 Security Administrators function Moscow region – Oct15 Accounts opening / online client profiles Moscow region - Mar15/Dec15 Handling internal payrolls Moscow region – Jan15 FX control Moscow region – Mar15 Fixed cash collection routs planning Part of Moscow region – Oct14 Credit middle and back office Moscow region – Dec14 Credit operations with large clients Moscow region – Dec14 Credit turnover/ reissue of bank cards on payrolls 2015 Establishing IT Help Desk/Service Desk 2015
- 11. 11 11,7% 11,4% 12,0% 8,8% 9,7% 9,9% 14,6% 13,2% 13,8% 11,2% 11,6% 12,3% Q2 2013 Q3 2013 Q4 2013 Q4 2013 Q1 2014 Q2 2014 Tier 1 Tier 1 + Tier 2 Statutory Capital (Н1.0) Statutory common equity Tier (Н1.1) Net profit – the main source of capital support …and net profit Stable provisioning allowed for steady operating profit… Capital adequacy Basel I Basel III RUB bln 188 247 724 428 431 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Net profit RUB mln +0.7% +129% 28,8% 31,2% 23,0% 25,8% 25,5% 3,5% 4,6% 13,2% 7,6% 7,5% Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Operating profit before provisions and taxation / Average equity ROE -1,3 -1,3 -0,4 -0,9 -0,9 1,5 1,7 1,3 1,5 1,5 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Provisions Operating profit before provisions and taxes +0.4% -4.4% ROE, %
- 12. 12 Questions andanswers investor@voz.ru http://www.vbank.ru/en/investors Elena Mironova Deputy Head of IR +7 495 620 90 71 E.Mironova@voz.ru Andrey Shalimov Deputy Chairman of the Management Board A.Shalimov@voz.ru
- 13. 13 Disclaimer Someof the information in this presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of Bank Vozrozhdenie (the Bank). Such forward-looking statements are based on numerous assumptions regarding 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 important factors that we cannot predict with certainty. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecasted in the forward-looking statements. These forward-looking statements speak only as at the date of this presentation and 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 related factors; - 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 the Bank 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 materially from 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 create and 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 to place 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 or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required under applicable laws.