Bank Uralsib Reports on 2009 Financials Results under IFRS
OREANDA-NEWS. June 04, 2010. BANK URALSIB (OJSC “URALSIB” or the Bank) (RTS: USBN) reported IFRS1 results of its operational performance for the twelve-month period ended December 31, 2009.
Key financial ratios |
31.12.2009 |
31.12.2008 |
Return on assets (RoA) |
0.4% |
0.6% |
Return on equity (RoE) |
3.2% |
4.8% |
Total capital adequacy (under Basel Accord) |
18.0% |
14.8% |
Tier 1 capital adequacy (under Basel Accord) |
13.7% |
11.2% |
Operating expenses/Net operating income (C/I) |
55.9% |
57.9% |
NIM |
11.1% |
11.4% |
Core banking income/Operating expenses |
134.1% |
177.9% |
Net income of the Bank for 2009 amounted to 1.8 bln rubles, while the pre-tax income reached 2.6 bln rubles.
Net fee/commission income and net interest income decreased by 23.5% and by 29.4% respectively in 2009 vs 2008. This reduction is compensated by net gains from securities in the amount of 5.1 bln rubles vs net loss of 3.2 bln rubles in 2008.
Net operating income before impairment of interest-earning assets amounted to 33.7 bln rubles, shrinking insignificantly by 1.5% vs 2008.
Operating expenses reduced by 4.9% in 2009 vs 2008; the major share of this reduction were provided by general and administrative expenses (decreased by 11.4%) and personnel expenses (decreased by 12.2%).
Core banking income/operating expenses ratio amounted to 134.1% in 2009. Operating expenses/net operating income ratio (C/I) shows the improvement of operating efficiency in 2009.
Key financials |
2009 |
2008 |
Change (%) |
mln rubles | |||
Net interest income |
20,210 |
28,619 |
-29.4% |
Net fee and commission income |
5,036 |
6,584 |
-23.5% |
Net gains/(losses) from securities |
5,104 |
(3,171) |
- |
Net gains from foreign currencies, derivatives and operations with precious metals |
555 |
1,289 |
-56.9% |
Other income |
1,563 |
1,116 |
40.1% |
Net operating income before impaiment of interest earning assets |
33,653 |
34,170 |
-1.5% |
Impairment of interest earning assets |
12,275 |
10,509 |
16.8% |
Net operating income |
21,378 |
23,661 |
-9.6% |
Operating expenses |
18,820 |
19,787 |
-4.9% |
Pre-tax income |
2,558 |
3,874 |
-34.0% |
Net income |
1,825 |
2,478 |
-26.4% |
Other comprehensive income, net of tax |
1,200 |
(1,244) |
- |
Total comprehensive income |
3,025 |
1,234 |
145.1% |
Economy recession impacted the Bank’s activities in 2009, especially in its first half.
During 2009, the overall loan portfolio2 of the Bank decreased by 17.3%, including loans to individuals - by 15.6% and loans to corporate clients - by 18.1% .
The share of loans to retail trade enterprises decreased from 22.0% to 18.2%, while the share of loans to real estate and construction industry decreased from 12.2% to 8.6%. Apart from these changes, the structure of the loan portfolio by industry did not change significantly. The share of loans to SME in the corporate loan portfolio remained steadily high at 47.7%.
NPL amounted to 21.9 bln rubles or 10% of the loan portfolio as of 31.12.2009. The LLP/NPL ratio on the overall loan portfolio amounted to 115.1%, breaking down into 136.6% for corporate loans and 80.8% for individuals.
The customer accounts-to-loan portfolio ratio was 128.8% as of 31.12.2009.
The structure of borrowed funds changed significantly. During 2009 the Bank reduced borrowings by 80% to 10 bln rubles. All borrowings from the CBR and Ministry of Finance of
Balance sheet |
2009 |
2008 |
Change (%) |
mln rubles | |||
Assets |
441,659 |
470,125 |
-11.4% |
Loan portfolio (gross) |
243,531 |
294,617 |
-17.3% |
Loans to individuals |
77,147 |
91,379 |
-15.6% |
Loans to corporates |
166,384 |
203,238 |
-18.1% |
Securities portfolio |
48,357 |
41,527 |
16.4% |
Debt securities |
28,639 |
36,832 |
-22.2% |
Equity securities |
18,639 |
2,944 |
533.1% |
Promissory notes |
784 |
1,715 |
-54.3% |
Units in investment funds |
1,252 |
746 |
67.8% |
Allowances for impairment |
-957 |
-710 |
34.8% |
Liabilities |
356,209 |
417,594 |
-14.7% |
Amounts due to credit institutions |
46,478 |
139,833 |
-66.8% |
Time deposits and loans |
30,568 |
99,902 |
-69.4% |
Subordinated loans |
7,485 |
7,216 |
3.7% |
Current accounts |
4,744 |
4,736 |
0.2% |
Syndicated loans |
3,247 |
24,052 |
-86.5% |
Repurchase agreements |
434 |
3,927 |
-88.9% |
Customer accounts |
281,166 |
246,196 |
14.2% |
Individual accounts |
100,707 |
74,046 |
36.0% |
Corporate accounts |
180,459 |
172,150 |
4.8% |
Equity |
60,450 |
52,531 |
15.1% |
Total equity reached 60.5 bln rubles, increasing by 15% during 2009. Tier 1 capital amounted to 52.7 bln rubles at 31.12.2009, growing by 14.8% vs 31.12.2008 (45.9 bln rubles). The Bank improved capital adequacy ratio under the Bank for International Settlements (BIS) methodology from 14.8% to 18.0%, as well as under Russian accounting legislation (N1 ratio) - from 12.7% as of 31.12.2008 to 16.6% as of 31.12.2009.
The Bank forecasts NPL stabilization without considerable change in 2010. Impairment of the loan portfolio is not expected to influence the financial result of 2010 as significantly as in 2009.
In 2010, the Bank anticipates the recovery of economy in
1 OJSC “URALSIB-YUG BANK” is consolidated in the financial statements under the de-facto control concept
2 Loans to corporates and to individuals (gross)
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