OREANDA-NEWS. January 25, 2010. BANK URALSIB (Bank) (RTS: USBN) reports on preliminary 2009 financial results under Russian Accounting Standards (RAS) before post balance sheet events1.

Key achievements

the Bank’s liquidity was maintained at sufficient level during the crisis year;

fulfillment of obligations to international counterparties: due repayment of all international syndicated loans maturing in 2009;

authorized capital of the Bank was increased by 30% to 26.5 bln rubles in IIQ2009 due to additional share issue;

full repayment of borrowings from federal budget and CBR unsecured funds;

return to the Bank’s profitability in IIH2009.

Financial results

Net loss of the Bank reached 4.3 bln rubles in 2009, pre-tax loss amounted to 4.2 bln rubles. This negative result was mainly caused by additional allowances for loan losses amounting to 13.7 bln rubles. The most considerable amount of allowances for loan losses (9.3 bln rubles) was formed in IIIQ09, reversing both net income of IH2009 (345 mln rubles) and net income of IVQ2009 (2.4 bln rubles).

Selected Income Statement items

12M09

IVQ09

12Q08

IVQ08

Change 12M 09/12M08

RUB mln.

Net interest income

14,793

2,893

21,255

6,024

-30.4%

Net fee and commission income

5,638

1,248

6,890

1,720

-18.2%

Net gains from operations with securities

4,723

922

-2,645

336

-

Net gains from operations with precious metals

1,003

232

2,061

700

-51.3%

Other non-interest income

450

153

189

-51

138.1%

Allowances for loan losses

-13,710

391

-4,809

-3,244

185.1%

Net operating income

12,897

5,839

22,941

5,485

-43.8%

Operating expenses

17,141

3,531

17,570

5,340

-2.4%

Pre-tax income/loss

-4,245

2,308

5,371

144

-

Net income/loss

-4,344

2,435

3,253

25

-

Supplementary allowances for loan losses were formed during 12M2009 due to the poor IH2009 financial results of the corporate borrowers. According to the Central Bank of Russia regulations, the Bank had to increase allowances for loan losses, despite due debt service of the borrowers.

Since September 2009 the Bank has been steadily generating net income, thus displaying its ability to absorb the negative effects caused by deterioration of borrowers’ credit quality.

Another positive factor is the decrease of overdue loans volume from 28.0 bln rubles as of IIIQ2009 to 22.4 bln rubles at the end of 2009 (by 20.1%). The allowances for loan losses/overdue loans ratio amounted to 118% as of 31.12.2009.

Due to the Bank’s efficient performance at Russian securities market, net gains from operations with securities grew up substantially to 4.7 bln rubles during 12M2009. These gains resulted from trading operations with equity and debt financial instruments and securities revaluation. Net gains from operations with foreign currencies and precious metals had similar dynamics, reaching 1.0 bln rubles by the end of 2009.

 Selected Balance Sheet items

31.12.2009

31.12.2008

Change,  31.12.09/31.12.08

RUB mln.

Assets

379,036

426,109

-11.0%

Equity

44,899

41,411

8.4%

Loan portfolio (gross)

201,706

264,600

-23.8%

Corporate loan portfolio

131,688

181,907

-27.6%

Retail loan portfolio

70,018

82,693

-15.3%

Customer accounts

237,362

214,235

10.8%

Corporate customers accounts

150,244

150,330

-0.1%

Individual customers accounts

87,118

63,905

36.3%

Securities portfolio

92,810

60,105

54.4%

Mainly due to reduction of loan portfolio during the reporting period the Bank’s assets reduced by 11.0% to 379.0 bln rubles.

The Bank’s loan portfolio dropped to 201.7 bln rubles (by 23.8% y-t-d). Loans to retail customers shrank to 70.0 bln rubles (by 15.3% to y-t-d), loans to corporate customers decreased to 131.7 bln rubles (by 27.6% y-t-d). Such dynamics resulted from toughening of risk-management system in crisis conditions. Thus assets structure underwent qualitative changes towards higher liquidity. Loan portfolio/customer accounts ratio decreased to 85% as of 31.12.2009 vs 124% as of 31.12.2008.

Customer accounts2  reached 237.4 bln rubles as of 31.12.2009, showing positive dynamics (by 10.8% y-t-d). Individual accounts increased to 87.1 bln rubles (growth by 36.3%). Corporate accounts showed high volatility during 2009, overall remaining at the same level amounting to 150.2 bln rubles y-t-d.

During 2009 the Bank gradually reduced borrowings raised under CBR unsecured auctions and the debt to Central Bank was fully repaid by the end of the year.

Besides, at the beginning of July 2009 the Bank duly repaid two syndicated loans with total amount of USD  717 mln.

Net income, gained by the Bank in December (1.4 bln rubles), and the increase of the authorized capital by 6.1 bln rubles due to additional share issue led to increase of total regulatory capital under CBR methodology to 54.0 bln rubles as of 01.01.2010 (by 10.7% d-t-d). As a result, the capital adequacy ratio (N1) highly exceeded the minimum level and reached 16.6% as of 01.01.2010.
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 Corporate and individual customer accounts exclusive of budgetary funds