AK BARS Bank reported RUB 2.9 bln. net profit
OREANDA-NEWS. AK BARS Bank reported RUB 2.9 bln. net profit in accordance with IFRS for the first half of 2016 AK BARS Bank has announced its IFRS Interim Condensed Consolidated Financial Statements and Report on review for six months ended 30 June 2016.
Zufar Garaev, Chairman of the Management Board, commented on the Bank's financial results for the first half of 2016: “AK BARS Bank performance improved as a result of the lower costs-to-income ratio and more than a fourfold increase of operating income (before provisions).
Despite the increase in provision due to conservative risk policy, we completed the first half of the year with profit.
The 1H 2016 financial results reflect the effectiveness of the implemented measures aimed at cost optimization and business processes improvement, improved approach to the issuance of new loans, optimization of the overdue debt repayment and decrease in the cost of financial resources.
We will continue to operate in accordance with the program developed at the end of 2015, and we expect a further increase of profitability from operations and operating efficiency.”
Financial highlights of Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
AK BARS Bank completed the first half of 2016 with a net profit of RUB 2.9 bln. according to IFRS against a net loss of RUB 4.6 bln. for the same time period in 2015. Return on equity for the first half of 2016 made 16% against 12.2% in the II half of 2015 owing to the increased revenues from all of the Bank's business lines.
Net interest income amounted to RUB 3.04 bln. against negative result of RUB 1.8 bln. for the previous year. A positive result is obtained by a significant reduction (by 17% YoY) of interest expenses as a result of a decrease in funding costs, while interest income increased by 7% to RUB 20.2 bln.
Operating income (before provisions) increased more than fourfold and amounted to RUB 17.4 bln. The significant increase in operating income was the result of improving profitability of the Bank`s core business lines.
The Bank's net interest margin increased from 0.3% in 2015 and reached 1.6% in the first half of 2016.
The Bank has significantly improved performance indicators. In particular, the cost-to-income ratio decreased to 22.4% from 87.2% in the first half of 2015. The improvement resulted from a moderate growth of operating expenses (by 8.3% to RUB 3.9 bln.) on the background of a fourfold increase in operating income (before provisions). Increase in operating expenses was mainly caused by the costs of new banking products development.