OREANDA-NEWS. On 28 August 2014, the Supervisory Board of Otkritie Financial Corporation Bank approved its Condensed Interim Consolidated Financial Statements in accordance with International Financial Reporting Standards (IFRS) as at 30 June 2014 and for the six months ended 30 June 2014, delivering on the key performance indicators set for the period.

Condensed interim consolidated financial statements of the Bank comprise the accounts of the banks included in Otkritie FC Banking Group (the “Group”) - OJSC Bank Otkritie, OJSC Khanty-Mansiysk Bank and OJSC Novosibirsk Municipal Bank.

Group achievements in the first half of 2014

Total operating income of the Group in the first half of 2014 reached its record level of RUB 36.7 billion having increased by 66.9% compared to 1H 2013.

Net profit in the first half of 2014 amounted to RUB 6.2 billion and was higher than earned in the 1H 2013 (RUB 6.1 billion).

Return on Equity (ROE) in the first half of 2014 amounted to 15.3% (including losses from negative revaluation of securities: 10.8%). ROE for 2013 amounted to 17.5%.

Net interest income and net fee and commission income were the key growth drivers for the Group's operating income, accounting for 81.7% and 17.2% of total operating income (excluding provisions for asset impairment and securities' revaluation).

Net interest margin increased to 5.3% (5.1% in Q1 2014).

Net interest income in the first half of 2014 increased by 78.8% year on year to RUB 32.3 billion.

Net fee and commission income in the first half 2014 increased by 62.5% year on year to RUB 6.8 billion. The greater part of the Group's net fee and commission income accounted for settlement transactions (RUB 2.8 billion) and commissions on agents' fees (RUB 1.7 billion) and documentary operations (RUB 1.5 billion). The retail business segment earned a considerable portion of the total net fee and commission income of the Group: in the first half of 2014 net fee and commission income of the retail business segment increased by 87.4% year on year to RUB 3.5 billion.

The Group's quarter-on-quarter operating expenses increased by 5.5%, and composed RUB 17.4 billion in the first half of 2014. Payroll expenses accounted for 63.5% of the Group's total operating expenses.

The Cost-Income Ratio (operating expenses to operating income before provision for impairment) was 47.4% (44.0% net of losses from negative revaluation of securities), compared to 48.8% in the 1H 2013.

Assets growth

As at 30 June 2014, the Group's total assets amounted to RUB 1,396.6 billion, demonstrating a 1.3% increase compared to 31 December 2013. Net loan portfolio accounted for 65.6% of the total assets as at 30 June 2014 (63.8% as at 31 December 2013).

As at 30 June 2014, the Group's net loan portfolio demonstrated a 4.2% increase compared to 31 December 2013, reaching RUB 916.0 billion.

The share of loans to related parties declined to 2.7% as at 30 June 2014 compared to 5.9% at the end of Q1 2014.

The loan loss provision (LLP) ratio stood at 3.4% as at 30 June 2014 (3.6% as at 31 December 2013). Non-performing loans stood at the level of Q1 2014 and composed 3.3%.

The Group's total liabilities amounted to RUB 1,254.8 billion as at 30 June 2014, increased by by 1.2% compared to 31 December 2013. Customer accounts accounted for 62.9% of the Group's total liabilities as at 30 June 2014.

Customer accounts including promissory notes issued to clients increased by 3.8% over the six month period and composed RUB 860.6 billion, comprising 68.6% of the Group's total liabilities (66.9% or RUB 829.1 billion in 2013). Term deposits including promissory notes issued to clients increased by 6.3% to RUB 682.3 billion (79.3% of total customer accounts including promissory notes issued to clients).

Interbank funding share composed 19.0% or RUB 238.8 billion as at 30 June 2014 (20.7% in 2013).

Other sources of funding remained unchanged: subordinated debt amounted to RUB 64.8 billion or 5.2% of the Group's total liabilities as at 30 June 2014.

The Tier 1 Capital Adequacy Ratio composed 10.2% as at 30 June 2014 (10.2% as at 31 December 2013); the Group's total equity amounted to RUB 141.8 billion, including RUB 29.8 billion of non-controlling interest. As at 30 June 2014, total capital adequacy ratio was 14.3%.