Alfa-Bank Announces Sound Financial Results for 2006
OREANDA-NEWS. In the audited reporting period Alfa-Banking Group recorded strong growth of its total assets to US$ 15.2 billion, up 54.6% from US$ 9.8 billion at the end of 2005. Net profit after tax grew by 5.4% to US$ 190.3 million, up from US$ 180.6 million in 2005. The Group’s total gross loan portfolio increased significantly by 64% to US$ 9.8 billion at the end of 2006 from US$ 6 billion at the end of 2005. The corporate loan portfolio grew by 54.1% to US$ 9 billion, while loans to retail clients increased 5.6 times to US$ 809.3 million at December 31, 2006. The retail loan portfolio share in total loans of Alfa Banking Group increased to 8.3% by the end of 2006 from 2.4% at the end of 2005. The amount of funds raised from individuals and corporate clients stood at US$ 7.9 billion at December 31, 2006, up 45.7% from US$ 5.5 billion at December 31, 2005.
Holding to the strategy of increasing diversification of funding sources, Alfa Banking Group has been active in the international capital markets. The total amount of funds raised by the Group in 2006 amounted to US$ 2.6 billion. In March 2006, Alfa-Bank successfully closed its debut US US$ 350 million transaction for the securitization of Diversified Payment Rights, which was the first ever transaction under a DPR Program executed by a Russian institution. A second DPR transaction was completed in December 2006 and consisted of two tranches (in Euro and US dollars) raising a further total of approximately US$ 560 million. In October 2006, Alfa Banking Group issued US$ 400 million notes under its EMTN Program. In addition to this, almost US$ 1 billion was raised by the Group in the syndicated loan market and around US$ 300 million was attracted through the ECP Program.
"The year 2006 is best characterized as a year of strong growth across all business lines and, in particular, of substantial progress in our retail business development. Our clear business strategy, analysis of market and operational risks, combined with our ability to execute set goals and objectives, further strengthened Alfa-Bank’s position as the leading private Russian bank. Our corporate and retail client base grew considerably - by the end of 2006 we served over 45 000 corporate and 2.4 million retail customers. Our branch network was extended to 229 offices across Russia and abroad from 121 at the end of 2005. Our evolving business model - focused on profitable and dynamic business segments, investing in operating platforms and in highly-qualified personnel, contributed substantially to the bank’s success and helped to achieve strong results in 2006. We are looking forward to serving the interests of our shareholders, our clients and employees and to continue delivering outstanding performance in 2007 and beyond." - says Petr Smida, CEO of Alfa-Bank.
Acknowledging Alfa-Bank’s achievements, in December 2006, international rating agency Standard & Poor’s upgraded Alfa-Bank’s credit rating to BB from BB- (both with stable outlook). Prior to this, In June 2006, Moody’s Rating Services upgraded Alfa-Bank’s financial strength rating to "D" from "D-", while the long-term foreign currency rating of the bank remained unchanged at Ba2.
In 2006, Alfa-Bank was also recognized as one of Russia’s most transparent banks according to the "Transparency and Disclosure by Russian Banks" research issued by Standard & Poor’s.
By the end of 2006, total equity of Alfa-Banking Group increased by US$ 455 million to US$ 1.3 billion, compared to US$ 856 million at the end of 2005. The Group’s after tax return on equity stood at a solid 17.6%.
Alfa-Banking Group’s IFRS figures have been audited by PriceWaterhouseCoopers.