AK BARS Bank has announced its IFRS Consolidated Financial Statements for the year ended 31 December 2014.
Despite the significant slowdown of the economic growth in 2014, the Bank managed to maintain the net interest income almost at previous year level increasing net commission income.
By the end of 2014, the Bank showed negative financial result compared to the net profit of 2.4 bln. rub. a year earlier. This was mainly driven by the reduction of operating income (before provisions) by 31.1% to 9.3 bln. rub. alongside with an increase in operating expenses by 9.9% to 8.5 bln. rub.
The Bank’s financial result under IFRS differs from the outcome in compliance with the Russian Accounting Standards (RAS). Recent measures undertaken by the Central Bank to maintain the stability (strength) of Russian Financial sector had the positive effect on the Bank`s statement, while IFRS method is not supposed to account these exemptions.
Net interest margin declined insignificantly by 0.3 basis points to 2.3%. This appeared as a result of an increased cost of funding due to the increase of the key rate of the Central Bank of the Russian Federation from 5.5% to 17% per annum. The Central Bank’s share in the Bank’s liabilities increased during the reporting year to 8.3% from 4% at the beginning of the year.
Despite the significant deterioration in the economic conditions, the Bank managed to keep the income from the core business. Net interest income for 2014 remained at the previous year level and amounted to 7.5 bln. rub. (before provisions). Net fee and commission income increased by 8.1%, to 1.7 bln. rub.
The Bank’s assets reached 433.3 bln. rub. increasing by 24.8%.
Loans to individuals increased by 14.8% to 59.9 bln. rub., while the growth of the total retail portfolio among Russian banks was 13.8%, according to the Central Bank of Russia.
Corporate credit portfolio reached 215.1 bln. rub. as of the end of 2014, that is 25.3% higher comparing with the beginning of the year.
Customer accounts increased by 9.3% to 80.6 bln. rub. that coincided with the rate of increase of the deposit amount among Russian banking sector reflecting customers’ high confidence in the Bank.
Legal entities accounts increased by 2.9% to 133.2 bln. rub.
Total customer accounts increased by 5.2% reaching 213.8 bln. rub.
Securities portfolio increased by almost a third — to 68.7 bln. rub.
Amount of investment properties decreased by 15.6% to 10 bln. rub.
The Bank’s equity declined by 1.8% making 30.3 bln. rub. at the end of the reporting period.
Capital adequacy ratios decreased, however, remaining at the acceptable level. Total capital adequacy ratio calculated in accordance with the International Convergence of Capital Measurement and Capital Standards declined to 11.2% from 14.5% in 2013, while the statutory capital ratio is 8%. Tier 1 capital adequacy ratio was 7.5%, decreasing from 9.7% (the statutory capital ratio is 4%).
To maintain capital adequacy ratios at the level consistent with the expected growth rate, the resolution accepted at the Extraordinary General Meeting of Shareholders of AK BARS Bank held on 3 April 2015 was to increase the share capital by issuing additional shares in total amount of 9.8 bln. rub.
AK BARS Bank was included in the list of 27 Russian banks selected by the Deposit Insurance Agency eligible for capitalization support through federal loan bonds. Implementation of this instrument corresponds to the Bank’s intentions in regard to the capital increase.
During the year, the Bank has successfully executed the put option on the BO-01 and BO-02 bond issues and repaid its obligation within Murabaha syndicated financing in the amount of US$100 mln.
In the end of the year, the Bank issued 5 bln. rub. 3-year rub. bonds and successfully closed its mortgage portfolio securitization deal within the issue of mortgage-backed bonds in the amount of 2.5 bln. rub. under the Programme of Vnesheconombank’s Investment in Affordable Housing Construction Projects and Mortgage Lending in 2010-2013.
AK BARS Bank (Open Joint-Stock Company) is registered with the Central Bank of Russian Federation and has been successfully operating in Russian financial market since 1993.
AK BARS Bank (Fitch «ВВ-», Moody’s «B1») is the largest bank headquartered in the Republic of Tatarstan offering over a hundred banking services to corporate and retail customers. The Bank is listed among Russia’s Top-20 financial institutions ranking 19th by equity and 19th by assets (according to ‘Profile’ magazine as of January 1st, 2015). The Bank’s branch network included 32 branches and 344 other offices.
AK BARS Bank is a reliable borrower in domestic and international debt markets. Currently the Bank has four ruble-denominated bond issues in circulation in total of 20 bln. rub. and two issues of Eurobond worth a total of US$ 1.1 bln.
More than 2.9 mln. retail customers and over 62,000 corporate clients use the Bank’s services. AK BARS Bank is the leading bank in the region representing 38% of the total assets and 42% of the total equity capital in the banking sector of the Republic of Tatarstan (as of 1 January, 2015).
For more information please refer to the Bank’s IR page https://www.akbars.ru/product/en/investor-relations/