AK BARS Bank 9 months 2017 Financial Results Release
04.12.2017

Based on the results for the first 9 months of 2017, AK BARS Bank reached the net profit of RUB 6.2 bln. that is almost 1,6 higher YoY. Herewith, the net profit in Q3 2017 increased 3.2 times YoY to RUB 2.8 bln.

This result was driven by income growth across all core business segments including an increase in net interest income by 35% YoY, net fee income by 15% YoY and income from securities by 15.5 YoY%.

Net interest income (before provision) for the first 9 months 2017 increased 1.35 times YoY and amounted to RUB 6.3 bln. within outrunning reduction in interest expenses.

Operating Cost-to-Income ratio was 28.4% compared to 29% for 9 months in 2016.

Administrative expenses increased as a result of increase in expenses for branch network development, increase in average salary and IT development — those are covering strategic objectives faced by the Bank.

Since the beginning of the year, the Bank total loan portfolio (before provision) has slightly decreased — by 6.0%, to RUB 222.1 bln. Herewith, corporate loans (before provision) decreased by 7.3% to RUB 152.9 bln., retail loans portfolio also decreased by 3.0% to RUB 69.2 bln. The total net loan portfolio has decreased by 8.5% to RUB 194.2 bln.

The Bank applies conservative approach to the provisioning of loan portfolio. This resulted in additional provisioning in the amount of RUB 9.7 bln. for the first 9 months of 2017.

Customers accounts for the first 9 months increased by 8.2% amounting to RUB 286.6 bln. at the end of the reporting period. This growth was fully ensured by the increase in corporate accounts by 15.4% to RUB 182.4 bln.). Whereas, individual accounts slightly decreased — by 2.4% to RUB 104.2 bln.

In the Bank’s liabilities, customer accounts was 90.7% as of the end of the reporting period against 73.9% at the beginning of the year.

Since the beginning of the year, the Bank has significantly increased its capital — by 27.9% to RUB 57.2 bln., as a result of, amongst others, the earned profit and placement of additional shares in the amount of RUB 10 bln. in June, 2017.

Return on equity of the Bank for 9 months 2017 г. improved significantly and accounted for 17.4% on an annualized basis. The return on assets has significantly increased to 2.1% against 1.2% in the first 9 months of 2016.

COMMENTARY

As follows from the financial results in the third quarter, the Bank successfully continues to pursue its Development Strategy for 2017-2021. We increased financial result almost 3,2 times compared to the same period last year, owing to growing profit in retail and corporate business, increased net interest and net fee income.

From the perspective of banking innovations, we succeeded in building the team with a focus on the development of domestic platform IT-framework. For certain, building innovation across our business will facilitate designated tasks solutions. Assuming there are a lot of challenges ahead, we will make efforts to follow up on further implementation of our Strategy.

Zufar Garaev, the Chairman of the Management Board.

Financial highlights for 9 months 2017
RUB MLN
9М 2017
9М 2016
Changes
Net interest income before provision 6 346,6 4 712,3 34,7%
Net fee income 1 886,2 1 640,8 15,0%
Income from securities 12 760,4 11 049,3 15,5%
Operating expenses -6 814,2 -6 093,2 11,8%
Provision for loan impairment -9 657,5 -10 336,6 -6,6%
Net profit 6 231,4 3 807,1 63,7%
RUB MLN
9М 2017
9М 2016
Changes
RUB MLN
Q3 2017
Q3 2016
Changes
Net interest income before provision 2 346,9 1 676,2 40,0%
Net fee income 655,4 548,4 19,5%
Income from securities 8 415,0 1 903,0 342,2%
Operating expenses -2 257,2 -2 199,7 2,6%
Provision for loan impairment -7 125,2 -363,9 1 858,0%
Net profit 2 811,9 876,7 220,7%
RUB MLN
Q3 2017
Q3 2016
Changes
RUB MLN
30.09.17
31.12.16
Changes
Assets 373 341,8 403 369,3 -7,4%
Loans and advances to customers 194 240,6 212 262,8 -8,5%
Customer accounts 286 648,7 264 917,8 8,2%
Equity 57 201,3 44 716,7 27,9%
RUB MLN
30.09.17
31.12.16
Changes
 
9M 2017
9M 2016
Changes
Return on Average Equity (ROAE) 17,4% 13,6% 3,8 p.p.
Return on Average Assets (ROAА) 2,1% 1,2% 0,9 p.p.
Operating expenses/Operating income 28,4% 29,0% -0,6 p.p.
Net interest margin 3,1% 2,1% 1,0 p.p.
 
9M 2017
9M 2016
Changes
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