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Raiffeisenbank has announced its IFRS financial results for Q1 2017
May 18 2017
AO Raiffeisenbank has announced its IFRS financial results for Q1 2017. All figures are provided in accordance with International Financial Reporting Standards (IFRS) and may differ from the Russian data in Raiffeisen Bank International AG (RBI) financial report as a result of the difference arising from consolidation and translation to Euro.
MAIN FINANCIAL RESULTS
INCOME STATEMENT
| 3 months 2016, RUB million | 3 months 2017, RUB million | change, % | |
|---|---|---|---|
| Net interest income before provisioning for impairment losses | 10 532.8 | 10 558.0 | 0.2% |
| Charge of provision for loan impairment | (4 051.7) | (458.4) | -88.7% |
| Net fee and commission income | 3 219.7 | 3 644.2 | 13.2% |
| Trading result | 2 326.5 | 1 806.5 | -22.4% |
| Administrative and other operating expenses | (6 079.1) | (6 499.7) | 6.9% |
| Profit before tax | 6 155.0 | 9 282.2 | 50.8% |
| Net profit | 4 867.1 | 7 288.7 | 49.8% |
| Cost/income ratio | 37.4% | 40.0% | +2.6 p.p. |
| ROE before tax | 25.3% | 31.1% | +5.8 p.p. |
| ROE after tax | 20.0% | 24.4% | +4.4 p.p. |
In Q1 2017, In Q1 2017, profit before tax increased by 50.8% from the same period last year and amounted to RUB 9,282.2 million. The bank’s net profit reached RUB 7,288.7 million, which is 49.8% higher than in Q1 2016. The main factors leading to the growth in profits were lower expenditures on the creation of reserves and the growth of net commission income.
In Q1 2017, the return on equity (ROE before and after tax) of the bank remained at a high level: 31.1% and 24.4%, respectively.
«The increase in profit before tax by 50% was the result of improving the asset quality in all business segments and growth of commission income, — said Sergey Monin, CEO of Raiffeisenbank. — The continuation of 2016 trend is positive for us in terms of active growth of mortgage portfolio, which increased by 14% as of the end of 1Q 2017».
In Q1 2017, the charge of provision for loan impairment amounted to RUB 458.4 million, which is 88.7% lower than the provisioning charges in Q1 2016 (RUR 4,051.7 million). The substantial decrease of charges resulted from the improvement of the quality of the portfolio across all segments. The cost of risk in Q1 2017 was 0.4% (annualized).
The net fee and commission income increased by 13.2% до RUB 3,644.2 million due to the higher fee and commission income from plastic cards and agency fees from the sale of insurance and pension products.
Net interest income before provisioning for impairment losses remained almost unchanged from Q1 2016 (down 0.2%) and amounted to RUB 10,558.0 million. On the one hand, there was a decrease in net interest income from derivative financial instruments. On the other hand, in Q1 2017 interest expenses on deposits from customers and financial institutions decreased, which had a positive effect on net interest income.
The trading result1 for Q1 2017 amounted to RUB 1,806.5 million, which is 22.4% lower than in Q1 2016, mainly due to the reduction in the income from securities2 (from RUB 434.9 million in Q1 2016 to RUB -29.2 million in Q1 2017).
The bank’s operating income before provisioning for impairment losses3 in Q1 2017 remained practically unchanged compared to the same period in 2016 (a decrease of 0.3%) and amounted to RUB 16,233.3 million.
Operating expenses increased by 6.9% to RUB 6,499.7 million, mainly due to higher staff expenses, as well as advertising and marketing. Cost control allows the bank to maintain the
STATEMENT OF FINANCIAL POSITION
| change, % | |||
|---|---|---|---|
| Assets | 753 800.0 | 775 639.6 | 2.9% |
| Liquid assets | 212 453.2 | 221 511.9 | 4.3% |
| Loans and advances to customers before provisioning: | 499 286.1 | 515 502.9 | 3.2% |
| Retail customers | 187 116.3 | 196 715.9 | 5.1% |
| Small and micro businesses | 14 052.5 | 14 413.8 | 2.6% |
| Middle businesses | 23 301.1 | 23 804.4 | 2.2% |
| Large corporates | 274 816.2 | 280 568.8 | 2.1% |
| Customer accounts | 547 596.7 | 550 772.3 | 0.6% |
| Term borrowings from parent bank | 32 326.5 | 30 104.6 | -6.9% |
| Equity | 115 905.1 | 123 193.8 | 6.3% |
| Share of loans individually determined to be impaired in total loan portfolio | 6.7% | 6.1% | -0.6 p.p. |
| Total Basel III capital adequacy ratio | 26.3% | 25.7% | -0.6 p.p. |
| H 1.0 capital adequacy ratio (calculated in accordance with the CBR methodology) | 16.3% | 15.9% | -0.4 p.p. |
The share of liquid assets at the end of March 2017 was 28.6%, an increase by 0.4 percentage points from the end of 2016. The bank has also overperformed CBR liquidity ratios: as of
Gross loan portfolio in Q1 2017 increased by 3.2% reaching RUB 515,502.9 million. There was the growth in the loan portfolio in all business segments: large corporates (+2.1% to RUB 280,568.8 million), middle business (+ 2.2% to RUB 23,804.4 million), small and micro businesses (+2.6% to RUB 14,413.8 million), retail customers (+5.1% to RUB 196,715.9 million). The main driver of growth in the retail loan portfolio was the mortgage portfolio, which increased by 14.4% in Q1 2017 to RUB 81,398.3 million.
The share of loans individually determined to be impaired in the total loan portfolio of the bank in Q1 2017 was 6.1% (down 0.6 percentage points from the end of 2016).
As of
Corporate accounts increased by 9.2% to RUB 210,313.0 million due to the growing current accounts by 3.3% and term deposits (+ 25.9%).
The
Term borrowings from the Parent bank decreased by 6.9% in Q1 2017 as a result of the impact of the negative currency revaluation and amounted to RUB 30,104.6 million. The share of term borrowings from parent bank in total bank’s liabilities reduced to 4.6% as of
The bank’s equity rose by 6.3% or RUB 7,288.7 million from the end of 2016 reaching RUB 123,193.8 million primarily on the back of the bank’s net profit in Q1.
The H 1.1 and H 1.24 capital adequacy ratios as of 1 April 2017 were 12.1% and 12.9%, respectively (up 1.9 and 1.8 percentage points compared to
1 The trading result includes: gains less losses from trading securities; gains less losses from other securities at a fair value through profit and loss; gains less losses from trading in foreign currencies; unrealised gains less losses/(losses less gains) from derivative financial instruments; gains less losses from derivative financial instruments; realised losses less gains from foreign exchange revaluations; amortisation of hedge adjustment and hedge ineffectiveness.
2 Includes income from the trading book and securities portfolio at fair value through profit and loss.
3 Calculated by subtracting from «Operating income» the following items: «Provisions for loan impairment», «Provisions for credit related commitments», «Provisions for investment securities held to maturity».
4 Calculated on the basis of Basel III requirements in accordance with the methodology of the Central Bank of the Russian Federation.
AO Raiffeisenbank is a subsidiary of Raiffeisen Bank International AG. Raiffeisenbank ranks 14th among the Russian banks in terms of assets, based on 2016 results (Interfax-CEA). According to the same Interfax-CEA data, AO Raiffeisenbank ranked 10th in terms of liabilities of individuals and 7th with regard to consumer lending.
Raiffeisen Bank International AG (RBI) regards both Austria, where it is a leading corporate and investment bank, as well as Central and Eastern Europe (CEE) as its home market. In CEE, RBI operates an extensive network of subsidiary banks, leasing companies and a range of other specialised financial service providers in 14 markets.
In total, more than 50,000 employees service 16.6 million customers through around 2,500 business outlets, thereof a majority in CEE. Since 2005, RBI's shares have been listed on the Vienna Stock Exchange.
After the merger of RBI and its former majority owner Raiffeisen Zentralbank Цsterreich AG (RZB) in March 2017, the combined institute operates - as previously RBI - under the name Raiffeisen Bank International AG. RBI took over all rights, obligations and duties of the transferring company RZB.
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