OREANDA-NEWS. May 14, 2010. B&N Bank has issued IFRS Consolidated Financial Statements for the year ended December 31, 2009 reflecting financial performance of the Group (B&N Bank, Vyatka-Bank, Bashinvestbank) for the past year, reported the press-centre of B&N Bank.

Total assets of the Bank increased from RUB 72.5 bln. to RUB 85.3 bln. (+17.6%), that significantly exceeds the average growth of assets in Russian banking sector. Moreover, some major Russian banks demonstrated decrease in assets at the average 10-15% that is caused by shrinking loan portfolios. Growth of B&N Bank’s assets is split equally between client loans, investments in securities and medium-term interbank credits.

The Bank’s loan portfolio as of December 31, 2009 amounted to RUB 46 bln. demonstrating stable growth from the beginning of 2009 (+11.8%), mostly due to increase in corporate lending. Changes in loan book structure were in line with the global market trend. Primarily they were related to increase in problem loans which came to its maximum at mid-year 2009. However, starting from July, the volume of overdue loans notably decreased. As of December 31, 2009 the volume of NPLs 90+ decreased by 9.4% compared to amount as of June 30, 2009. As a result the share of NPLs 90+ in the total loan portfolio came to 9.56%.

Maintenance of the solid liquidity profile and its priority over profitability has become the main strategic goal for the Bank since the end of 2008. Stable liquidity position is backed with portfolio of liquid securities included in the Lombard List of the Central Bank of the Russian Federation. As of the end of 2009 CBR prudential ratios governing liquidity were considerably better than satisfied (Н2 “instant liquidity” – 131.9% at min. 15%; Н3 “current liquidity” – 136.6% at min. 50%; Н4 “long-term liquidity”– 101.9% at max. 120%).

As of December 31, 2009 total liabilities of the Bank increased by 23% since the beginning of the year and totaled about RUB 78.6 bln. The main shifts in the structure of liabilities were backed by the Bank’s strong market position resulting in a substantial growth of customer accounts (+32%) up to RUB 65.8 bln. Retail deposits were the Bank’s largest source of funding which progressed from RUB 35.5 bln. up to RUB 51.9 bln.(+47%). Share of funds drawn from international financial markets significantly declined due to successful redemption/repayment of USD100 mln. Eurobond issue and USD27 mln. syndicated loan throughout the year.

In 2009 the Bank’s capitalization was pressured by credit risks aggravated by the crisis, which resulted in increased expenses for loan loss provisions. In the context of unstable financial situation, increased credit risks and in accordance with the major shareholder’s perception B&N Bank still adheres to the conservative policy for formation of loan loss provision. The main increase in expenses for provisions occurred in the first half of 2009; in the latter half of the year additional provisions recognized were not so substantial as a result of credit risks stabilization. As of December 31, 2009 the total amount of the loan loss provision reached RUB 4.9 bln. As a result the Bank registered net loss amounted to RUB 1.7 bln. at the reporting date.

Capital of the Bank decreased by 15% from RUB 11.4 bln. to RUB 9.7 bln. Nevertheless, the Bank has retained the capital adequacy ratio at 14.1% that substantially exceeds the required criteria established by the regulating authority (10%). For the purpose of increasing capitalization in March 2010 the Bank received a subordinated loan amounted to USD50 mln. Likewise, the Bank intends to place USD100 mln. additional shares issue till the end of 2010 if it is necessary to maintain capital adequacy at the required level. The Bank has good opportunities for capitalization improvement due to strong commitment of its owner for any adequate support.

As of December 31, 2009 the Bank’s sales network accounts for 159 offices: B&N Bank - 118 points (29 branches over the Russian Federation, 84 subbranches, 3 representative offices and 2 operating points), Vyatka-Bank – 27 points and Bashinvestbank – 14 points. Throughout the year the Bank opened 8 new offices and 7 of them started their operating activity in 2009.