OREANDA-NEWS. June 20, 2012. Gazprombank released interim condensed consolidated financial statements per IFRS for the first quarter of 2012. Key indicators of Gazprombank Groups financial performance are listed below:

billions of Roubles

 

31.03.2012

31.12.2011

Change over 1Q2012

Assets

2 462.5

2 477.7

0.6%

Equity

259.4

242.9

+6.8%

Corporate loans, gross

1 336.4

1 311.6

+1.9%

Retail loans, gross

150.0

142.7

+5.1%

Securities

321.1

296.5

+8.3%

Corporate customer accounts

1 383.5

1 249.1

+10.8%

Retail customer accounts

270.3

266.5

+1.4%

Capital market borrowings*

213.4

211.1

+1.1%

Subordinated deposits

126.2

133.6

5.5%

 

 

1Q2012

1Q2011

Change
2012 / 2011

Net income

12.3

33.5

63.4%

Total comprehensive income

11.2

20.5

45.2%

 

 

31.03.2012 /
1Q2012

31.12.2011 / 12M2011

Change

Total capital adequacy**

14.7%

14.6%

+0.1 p.p.

Tier 1 capital adequacy **

9.7%

9.6%

+0.1 p.p.

Non-performing loans to gross loans

1.4%

1.4%

-

Loan loss provisions to gross loans

3.7%

4.0%

0.3 p.p.

Loans (gross) to deposits ratio

89.9%

95.9%

6.0 p.p.

Return on average equity

19.5%

17.0%

+2.5 p.p.

Return on average assets

2.0%

2.0%

-

Net interest margin

2.5%

3.6%

1.1 p.p.

Cost to income ratio

44.5%

39.4%

+5.1 p.p.

* bondsissuedandsyndicatedloans

** per BIS recommendations (Basel I)

Income statement and capital adequacy

Gazprombank Groups net income per IFRS for the first quarter of 2012 amounted to RUB 12.3bn vs. RUB 33.5bn for the first three months of 2011. Comprehensive income for the first quarter of 2012 was RUB 11.2 bn vs. RUB 20.5bn for the same period of 2011. Higher levels of income in 2011 were driven by revenues from the sale of an investment portfolio of equities in line with the Banks policy to reduce market risk, as well as by one-off commissions. Adjusted for their contribution, the Groups net income in the first quarter of 2012 was higher than that of the same period in 2011 by 8%.

The return on equity for the three months of 2012 was 19.5% (17.0% for the year 2011), while the return on assets remained at the level of 2011 of 2.0%.

The Groups equity rose by 6.8% vs. the end of 2011 to reach RUB 259.4bn, driven by the retention of net income earned by the Group in the first three months of 2012, as well as by the conversion of JSC  Gazprom subordinated deposit in the amount of RUB 7.5bn into common stock of Gazprombank which is a part of the additional share placement that is currently under way.

Total capital adequacy ratio per Basel 1 was 14.7% at 31.03.2012 vs. 14.6% at the end of 2011, while Tier 1 ratio was 9.7% vs. 9.6% at the end of 2011. Capital adequacy ratios exceed the minimum level of 8% established by the Basle Accord.

The conversion of subordinated deposits from the banks shareholder Non-state Pension Fund Gazfond and from the State Corporation Bank for Development and Foreign Economic Activities (Vnesheconombank), which is taking place in June 2012, is expected to further support the Banks capital base.

Balance sheet indicators and asset quality

The share of the loan portfolio (net of loan loss provisions) in the Groups assets rose from 56.4% at the end of 2011 to 58.1% at the end of the first quarter of 2012. The corporate loans grew by 1.9% over the quarter to reach RUB 1,336.4bn, primarily thanks to the growth in commercial lending. The retail loan book also grew by 5.1% from RUB 142.7bn at the end of 2011 to RUB 150.0bn at 31.03.2012, principally driven by a growing mortgage portfolio.

The fixed income securities book rose in the first quarter of 2012 by 13.1% to reach RUB 237.9bn due to an increase in liquid corporate fixed instruments of Russian issuers. Overall, the securities portfolio rose by 8.3% since the end of 2011, standing at RUB 321.1 bn at the end of the quarter.

At 31.03.2012 corporate customer accounts were RUB 1,383.5bn, up by 10.8% since the end of 2011. Retail deposits posted a more moderate growth of 1.4% over the quarter, reaching RUB 270.3bn at the end of March 2012. Customer accounts remain the principal source of the Groups funding, constituting 75.1% of its liabilities at 31.03.2012.

The Groups asset quality remains high: at the end of the first quarter of 2012 the share of non-performing loans (loans overdue 90 days and more) in the gross loan book was 1.4%, while the loan loss provisions were 3.7% of gross loans. Loan loss provisions cover the non-performing loans by 2.6 times.

We consider the result of the first quarter of 2012 to be generally positive and in line with our financial target for net income for this year. A slight compression of net interest margin in the first three months of 2012 is attributed to the overall market-wide trend of an increasing cost of funding, the margin is expected to improve in the second quarter of 2012. In general, Gazprombank expects lending growth in 2012 to be above its planned growth target of 11%, notes Mr. Alexander Sobol, Deputy Chairman of the Management Board of Gazprombank.