OREANDA-NEWS. On 21 January 2009 BANK URALSIB (URALSIB or Bank) (RTS: USBN) reported on preliminary 2008 financial results under Russian Accounting Standards (RAS) before post balance sheet events1.

Key achievements

 During the reporting period the Bank's assets increased by 18.4% - from 359.8 bln rubles to 426.1 bln rubles. 

 Prudential capital2 for 2008 grew up by 23,6% - from 39.5 bln rubles as of 01.01.2008 to 48.8 bln rubles as of 01.01.2009, first of all, due to the 6 bln rubles subordinated deposit from Russian investors secured in December 2008. 

 Net income for 2008 reached 3.3 bln rubles (161.3% growth vs y-o-y 2007). Pre-tax income amounted to 5.4 bln rubles (13.7% growth). 

Financial results

Net income of the Bank reached 3.3 bln rubles for the reporting period of 2008 (increasing by 2.6 times) vs 1.2 bln rubles for 2007. Pre-tax income amounted to 5.4 bln rubles vs 4.7 bln rubles for 2007. In December 2008 net income of the Bank amounted to 831 mln rubles and pre-tax income - 862 mln rubles.

Net income was mainly influenced by supplementary allowances for loan losses in IVQ2008 as well as by short-received gains from securities caused by the stock market turbulence. The Bank's 2008 net income will be updated upwards due to the income tax advance payment and other transactions performed in 2008 after reporting date.

Net operating income for 12 months of the reporting period reached 22.9 bln rubles, indicating 16.7% growth vs y-o-y 2007.

During the reporting period core banking income was up to 23.3 bln rubles (68.2% growth vs y-o-y 2007). In particular, during 12 months net interest income grew to 21.3 bln rubles, thus increasing almost by 2 times vs y-o-y 2007. Net fee and commission income during 2008 exceeded 6.9 bln rubles, indicating 27.2% growth vs y-o-y 2007.

The Bank's securities and foreign currencies transactions remained profitable during last months of 2008 despite volatile stock market. Net gains from operations with securities (1.2 bln rubles) and foreign currencies (513 mln rubles) in December 2008 allowed to partially neutralize the results of the previous months.

Balance sheet

In the reported period the Bank showed acceptable growth rates of key balance sheet figures. The assets grew by 18.4 % up to 426.1 bln rubles. The loan portfolio rose up to 264.6 bln rubles (also by 18.4% y-t-d). Loans to individuals were up to 82.7 bln rubles as of 01.01.2009 (by 33.5% up y-t-d), thus contributing to the loan portfolio growth. Meanwhile loans to corporate customers increased up to 181.9 bln rubles (12.6% growth y-t-d).

Customer accounts (excluding budget funds) indicated growth of up to 214.2 bln rubles as of 01.01.2009 (up 10.9% vs 01.01.2008). In particular, amounts due to corporate customers rose to 150.3 bln rubles (21.1% up y-t-d), primarily due to 71.1% increase in term deposits. The last month of the reporting period witnessed the rise in corporate accounts, first of all, current accounts; It provided for net increase in amounts due to corporate customers of up to 11.3 bln rubles in December, 2008.

The similar trend in December 2008 was also seen in amounts due to individuals. Due to net increase of 4.7 bln rubles (8% up for December) the Bank managed to partially offset the outflow of amounts due to individuals recorded in the recessionary October-November 2008, and showed insignificant reduction of individual accounts at the year end - to 63.9 bln rubles.

In the reported period the Bank's securities portfolio experienced minor changes in absolute terms - the growth of up to 60.1 bln rubles (2.4% up y-t-d). However the portfolio structure underwent quality changes. In particular, equities' volume shrank by 52.5% for 2008, and their share in assets reduced to 1.5%. Debt securities portfolio remained practically at the same level at the year end (2.2% down y-t-d); there was also increase in units in investment funds.

Key ratios

The growth of the core banking income and expenses control allowed to improve considerably the core banking income/operating and administrative expenses ratio up to 132.8% as of year-end (vs 92.9% in 2007). Cost-to-Income (C/I) was also significantly improved to 63.3% (vs 67.7% in 2007).

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1 - Nonconsolidated financial results of OJSC "URALSIB" under Russian Accounting Standards (RAS). Following the results of post balance sheet events, the results may be updated

2 - Regulatory total Tier 1 and Tier 2 capital calculated according to Central Bank of Russia standards (f. 134)