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Financial Results for 2013

04.04.2014

The NOMOS-BANK Group has published its audited consolidated IFRS financial statements for 2013.
On April 3, 2014, the Supervisory Board of NOMOS-BANK approved the Consolidated IFRS Financial Statements for 2013.
In 2013 NOMOS-BANK obtained control over Otkritie Bank. Otkritie Bank’s Balance Sheet and Cash Flow Statement as at December 31, 2013 have been consolidated with the data of the NOMOS-BANK Group. However, NOMOS-BANK Group’s 2013 Profit and Loss Statement does not include Otkritie Bank because control over Otkritie Bank was only obtained at the end of 2013.

Achievements of the Group in 2013

Substantial growth of revenues from core activities

The NOMOS-BANK Group generated RUB 17.3 billion of net profit in 2013 - the record volume for 20-year history of the Group. The yearly return on equity (ROE) was 17.5%1 (18.3% in 2012) and the return on average assets in 2013 was 1.7% (2.0% in 2012). Earnings per share was RUB 154.1 in 2013.
Total operating earnings before provisioning for impairment of assets amounted to RUB 53.2 billion in 2013 (up 19.0% y-o-y).
Net interest income and net fees and commission were the principal contribution to the Group’s earnings and comprised 76.5% and 16.9% of the Group’s earnings, respectively. Other the year, the Group’s net interest margin decreased to 4.4% (4.9% in 2012) due to the growth of funding costs affected by the overall market situation and the higher share of long-term funding in liabilities of the Group.
Net interest income in 2013 increased by 29.7% to RUB 40.7 billion thanks to the successful growth of the Group’s loan portfolio, which outperformed the market average growth rate.
Net fees and commission increased by 13.2% reaching RUB 9.0 billion in 2013 as a result of the successful implementation of the Group-wide cross-sales strategy. The majority of net fees and commission of the Group was generated from settlement and documentary operations in the corporate, retail and investment banking segments. Net fees and commission from settlement transactions in 2013 amounted to RUB 3.7 billion. At the same time, the Group earned RUB 2.7 billion from documentary transactions.
Net earnings from trading operations reached RUB 783 million in 2013 (RUB 3.3 billion in 2012). The total amount of trading income in 2013 was adversely affected by the negative revaluation of the Group fixed income securities portfolio in line with the overall volatility in financial markets.
The Cost-Income Ratio (ratio of operating expenses to operating income before provisioning for asset impairment) amounted to 41.3% in 2013, which is one of the best results achieved in the market (47.8% in 2012).
Operating expenses almost did not change compared to 2012 and comprised to RUB 22.0 billion. In 2013, the Bank completed the centralisation of all its supporting functions and unified the goods and services procurement system across all structural subdivisions of the Bank and its subsidiaries. These developments helped to minimise the increase in operating expenses in 2013.

Steady growth of assets at above mid-market rate
In 2013, the amount of total assets of the Group taking into account the consolidation of Otkritie Bank reached RUB 1,379.1 billion increasing by 53.2% y-o-y and outperforming the market average growth rate.
The net loan portfolio of the Group as at December 31, 2013 was up 48.9% to RUB 879.3 billion. The volume of loans to corporate customers increased by 30.6% to RUB 551.2 billion. The volume of loans to retail customers increased by 92.0% to RUB 173.1 billion mainly due to consolidation of Otkritie Bank. The volume of loans to small businesses increased by 24.0% up to RUB 48.3 billion.
The high rates of growth of the Group’s business were balanced by its conservative risk management policies. The level of non-performing loans stood at 2.9% as at December 31, 2013 which is one of the best ratio achieved in the market.
In 2013, the cost of risk amounted to 1.2%. The main volume of loan loss provisions includes collective (statistical) provisions for the portfolio of standard loans.
The Group’s total liabilities reached RUB 1,239.7 billion as at December 31, 2013, having increased by 53.1% y-o-y. The share of deposits in the funding structure amounted to 63.0% from the total liabilities of the Group as at December 31, 2013.
The Group’s customer accounts increased to RUB 781.5 billion as at December 31, 2013, demonstrating 65.7% increase y-o-y. The volume of term deposits and the share of current accounts as a proportion of the total amount of customers’ funds were 76.1% and 23.9%, respectively. Deposits from corporate customers account for 55.1% as at December 31, 2013, while the share of individuals and customers from the small business segment amounts to 41.5% of customer deposits2. As at December 31, 2013, the loan to deposit ratio was 112.5% (125.2% as at the end of 2012).
The total equity of the Group amounted to RUB 139.4 billion (RUB 90.4 billion as at the end of 2012). The total Group capital adequacy ratio stood at 14.4%, tier 1 capital adequacy ratio stood at 10.2% as at December 31, 2013 (10.8% in 2012).

 


1 ROE of NOMOS-BANK Group not taking into account the share capital increase (SPO in October 2013) intended for acquisition of the controlling stake in Otkritie Bank.

2 Calculated from the share of deposits of customers from the core segments of Group’s operation, except for the Treasury office and non-distributable transactions.