OREANDA-NEWS. Gazprombank (Open Joint-stock Company) issued consolidated IFRS financial statements for the six months of 2013.

Gazprombank Group's (the “Group”) total assets per IFRS financial statements for the six months of 2013 increased by 13.2% and amounted to RUB 3 216.9bn as of 30 June 2013. The asset growth was driven by the organic growth of the Group's banking operations.

The corporate loan book posted a growth of 13.4% since the end of 2012 to reach RUB 1 829.5bn. Commercial lending constituted 70.5% of the corporate loan portfolio and investment financing - 29.5%. Retail loan book grew from RUB 210.3bn at the end of 2012 to RUB 248.1bn at the end of June 2013, increasing by 18.0%. The major part of the retail loan book (68.6%) comprised mortgage loans.

Consequently, the Group posted above market average loan growth. In the first half of 2013 the average market growth of corporate loans was 5.3%, retail loans - 13.7% (per the Central Bank of the Russian Federation data).

Asset quality of the Group remains traditionally high: as of 30 June 2013 the non-performing loans (overdue 90 days or more) were 1.0% of gross loans; the loan loss provisions were 3.5% of gross loans. The coverage ratio of non-performing loans by allowance for impairment amounted to 3.6x.

The Group's securities portfolio expanded by 21.3% over the reporting period to reach RUB 400.6bn driven by an increase in investments in fixed income securities of Russian sovereign and corporate issuers. 77.8% of the Group's securities portfolio is represented by fixed income instruments.

Corporate deposits totaled RUB 1 760.9bn as of 30 June 2013, up by 23.4% since the end of 2012. Retail deposits grew by 11.5% to reach RUB 351.9bn as of 30 June 2013. The customer accounts continue to be the principal source of the Group's funding: their share in the funding base was 74.2% as of 30 June 2013.

The borrowings from debt capital markets increased by 7.4% to RUB 336.9bn at the end of June 2013; their share in total liabilities was 11.8%.

Profitability and capital adequacy

The Group's net profit per IFRS financial statements for the six months of 2013 amounted to RUB 12.4bn vs. RUB 10.6bn for the six months of 2012. Comprehensive income for the six months of 2013 was RUB 11.5bn vs. RUB 9.2bn for the same period of 2012.

The revenue from core banking business, net interest and fee income, for the six months of 2013 increased by 25.2% vs. the six months of 2012 to reach RUB 40.8bn. The same measure for the second quarter of 2013 posted a growth of 10.3% vs. the first quarter of 2013. Net interest margin for the six months of 2013 remained flat compared to the end of 2012 at 2.9%.

The Russian stock and bond markets' negative performance during the first six months of 2013 has led to unrealised losses on our securities portfolio. Overall, gains from operations with securities, foreign currencies and derivatives for the six of 2013 amounted to RUB 0.1bn vs. RUB 6.6bn for the same period of 2012.

The Group's operating expenses for the six months of 2013 totaled to RUB 26.6bn, increasing by 9.5% vs. the six months of 2012. Such moderate growth of operating expenses was lower than the achieved growth of operating income: the operating income grew by 10.7% in the first half of 2013 in comparison with the same period of 2012 to reach RUB 50.6bn. The cost-to-income ratio was 52.7%.

The Group's capital increased by 1.7% vs. the end of 2012 and reached RUB 369.5bn. The growth was achieved through capitalization of profit and was also influenced by dividend distribution for 2012 in the amount of RUB 5.9bn. The Tier 1 capital adequacy ratio per Basel II was 10.2% as of 30 June 2013 vs. 11.0% at the end of 2012, while total capital adequacy ratio was 12.8% at the end of June 2013 vs. 13.9% at the end of 2012 which is higher than the minimum 8% required by the Basel Framework.

“In the second quarter of 2013 the Bank continued its dynamic business development. We managed to achieve substantial corporate loan book growth, while maintaining the level of interest margin typical for our clientele and high asset quality. The recurring revenues from the core commercial banking activities remain the major part of the Bank's operating income which ensures persistent level of profitability despite unfavorable financial market conditions. The results achieved allow the Bank to fully comply with the requirements of the Central Bank of the Russian Federation, including expected new set of Basel III requirements”, noted Mr. Alexander Sobol, Deputy Chairman of the Management Board of Gazprombank.