AK BARS Bank reported RUB 1.1 bln. net profit in accordance with IFRS for the first quarter ended 31 March 2016

The Chairman of the Management Board of AK BARS Bank Zufar Garaev commented on the Bank’s IFRS results for the first quarter of 2016:

— The Bank consistently implements measures to improve the Bank’s financial performance, constantly upgrading the existing approaches and quickly adjusting to the current challenges. We continue to improve our efficiency in order to increase profitability of transactions, operating growth and optimize the costs. The results of the Bank for the first quarter allow forecasting further growth in revenue and efficiency.

Financial highlights of Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

AK BARS Bank completed the Ist quarter of 2016 with a net profit of RUB 1.1 bln. according to IFRS against a net loss of RUB 6.2 bln. for the same time period in 2015. Upward dynamics was mainly caused by the positive net interest income (before provisions) in the amount of RUB 1.2 bln. against a negative result (RUB −0.9 bn.) for the previous year and significant growth of the net non-interest income — 7.5 times, to RUB 8.3 bln.

Net interest income (before provisions) for the first quarter 2016 amounted to RUB 1.2 bln. against a negative result for the previous year. The amount of interest income increased by 17.5%, to RUB10.5 bln., interest expenses decreased by 5.4%, to RUB 9.3 bln.

Net fee and commission income also showed an increase of 25.1% YoY reaching RUB 0.5 bln.

The cost-to-income ratio decreased to 18.5% in the first quarter of 2016 in comparison to the level of 42.8% in 2015. In addition of obtaining high returns on financial instruments, this was the result of effective control over operating expenses, which increased insignificantly to RUB 1.8 bln. — only by 2% compared to the first quarter of 2015.

Key indicators of the Statement of financial position:

The Bank’s assets made RUB 419.7 bln. as of 31 March, with a decrease of 5.3% compared to the beginning of the year.

The share of customer accounts decreased to 55.3% in liabilities structure from 55.8% at the beginning of the year, while the share of amounts due to the Central Bank of the Russian Federation increased to 6.3% from 1.4%. Such dynamics in customer accounts was mainly due to the foreign currency translation as a result of strengthening of the ruble at the end of the first quarter.

Since the beginning of the year the Bank’s loan portfolio (before provisions) increased by 3.5%, to RUB 290 bln. Mainly, the increase in the loan portfolio was achieved through the growth in corporate loans (before provisions) by 6.7%, which amounted to RUB 212.8 bln. The growth of loans to individuals (before provisions) amounted to 1.5%, up to a level of RUB 65 bln.

During the reporting period, the Bank increased provisions to RUB 6.5 bln. against RUB 5.8 bln. a year earlier.

Equity of the Bank increased by 0.7% since the beginning of the year and as of 31 March 2016 amounted to RUB 35.9 bln.

The Bank’s IFRS statement in Russian is available through https://www.akbars.ru/about/free-info/reports/

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