AK BARS Bank reported RUB 3.8 bln. net profit in accordance with IFRS for 9 months ended 30 September 2016

AK BARS Bank has published today its IFRS Interim Condensed Consolidated Financial Statements for 9 months ended 30 September 2016.

Zufar Garaev, Chairman of the Management Board, commented on the Bank’s financial results: «AK BARS Bank gained the net profit of RUB 3.8 bln. Continued profitable growth was achieved by increasing revenue from all business lines and strict cost control.

We expect further growth in our business efficiency by speeding up our transformation program. The Bank is entering its 23-year anniversary with a number of successful digital projects by being pro-active in innovation development».

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

Net profit of the Bank amounted to RUB 3.8 bln. In the 3rd quarter of 2016 the net profit was RUB 877 mln. Return on equity reached 13.6% due to increased revenues from all business lines, the return on assets amounted to 1.2%, comparing to the negative value of this indicator a year earlier.

Net interest income (before provisions) reached RUB 4.7 bln. for the first 9 months of 2016. In the 3rd quarter the net interest income before provisions amounted to RUB 1.7 bln. A positive indicator was achieved due to the decrease in funding costs, that allowed reduce interest expenses over the first 9 months of 2016 by 20% YoY with only a slight decrease (by 2%) in interest income.

Operating income before provisions for January-September 2016 increased by more than four and a half times compared to the same period in 2015, and amounted to RUB 21 bln.

Net commission income in January-September 2016 showed an increase of 17.5% YoY, totalling RUB 1.6 bln.

Transactions with securities also had a significant positive impact on the Bank’s results.

During the reporting period operating expenses stayed flat compared to last year at RUB 6.1 bln. The cost-to-income ratio was 29% vs. 43% for the full year 2015.

Key indicators of the Statement of financial position:

Over the 9 months period the Bank’s assets have decreased by 10.5% to RUB 396.5 bln.

The total loan portfolio of the Bank decreased by 10.2% since the beginning of the year and amounted to RUB 226.6 bln. as of 30 September 2016. The share of loan portfolio in assets changed slightly and amounted to 57.2% against 57% at the beginning of the year.

Between April and September 2016, despite the economic decline, the Bank has repurchased part of its subordinated eurobonds in the amount of RUB 23.4 bln. thereby reducing the Bank’s liabilities.

The Bank increased its customer accounts, by replacing borrowings from the Bank of Russia with other less expensive sources of funding. As a result, customer accounts increased by 12.1% since the beginning of the year to RUB 268.5 bln. as of 30 September 2016. This increased their share in total liabilities to 75% from 59% at the beginning of the year.

The level of provisions against the loan portfolio increased to 13.6% from 10.1% at the beginning of the year, amounting to RUB 35.8 bln. In the 3rd quarter the amount of additional provisions was at a minimal level compared to the previous two quarters, reaching RUB 0.4 bln. Thus, the cost of risk of 5.8% increased by only 1 percentage point, compared to the results for 2015.

Corporate customers accounts showed the largest growth increasing by 21.1% since the beginning of the year, and as of 30 September reaching RUB 170.1 bln. The amount of individual accounts changed slightly (-0.8%) and amounted to RUB 98.4 bln.

Equity of the Bank calculated in accordance with the requirements of Basel III at 9 months end of 2016 accounted for RUB 57.9 bln.

The Bank’s IFRS statements in Russian are available at https://www.akbars.ru/about/free-info/reports/

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