Raiffeisenbank announces its results for the first quarter of 2013 in accordance with International Financial Reporting Standards on a consolidated basis
ZAO Raiffeisenbank results for 3 months of 2013 are provided in accordance with International Financial Reporting Standards (IFRS) and may differ from the «Russia» segment data in Raiffeisen Bank International financial report as a result of the difference arising from consolidation.
- Profit after tax for 3 months of 2013 reached RUB 6 305.2 million, rising by 43.9% (or RUB 1 922.9 million) compared to RUB 4 382.3 million for the first three months of 2012.
- Operating income before provisioning1 for the first quarter reached RUB 12 507.1 million, an increase by 14.3% (or by RUB 1 569.2 million) compared to RUB 10 937.9 million in the first quarter of 2012, primarily due to the positive performance of the following factors: net interest income before provisioning for loan impairment2, trading result3, net fee and commission income, as well as due to moderate growth of administrative and other operating expenses.
- Net interest income before deduction of provisioning for loan impairment4 for the first quarter of 2013 grew by 10.3%, or by RUB 758.8 million to RUB 8 136.4 million due to the increase of interest income on loans and advances to retail customers as a result of retail loan portfolio growth, as well as due to the decrease of interest expense on term deposits of legal entities.
- Trading result5 grew by 32.2% to RUB 1 830.4 million (+ RUB 445.9 million) compared to RUB 1 384.5million in 3 months of 2012, primarily due to one-off effect — gain from redemption of investment securities available for sale (RUB 1 032.5 million compared to RUB 15.2 million loss in first quarter of 2012).
- Net fee and commission income rose by 16.8% (or by RUB 331.7 million) to RUB 2 307.8 million in first 3 months of 2013 in comparison with RUB 1 976.1 million in first quarter of 2012. The main drivers of growth were the rise in commissions on operations with plastic cards by 15.2% (or by RUB 109.1 million) due to the increase in the number of cards serviced and the increase in volume of agent insurance fee by 83.0% or by RUB 119.8 million).
- Administrative and other operating expenses for the three-month period of 2013 reached RUB 5 145.2 million, demonstrating the increase by conservative 4.9% or by RUB 238.3 million compared to the figure in the first quarter of 2012. The cost-to-income ratio for the first quarter of 2013 dropped to 41.1% compared to 47.6% as of 31.12.2012 and 44.9% as of 31.03.2012 due to the Bank’s policy of cost optimization and improvement of existing business processes and technologies.
- Assets increased by 1.8% to RUB 648 972.7 million compared to RUB 637 222.2 million as of 31.12.2012, primarily due to the growth of securities portfolio (by 39.7% or by RUB 20 116.4 million to RUB 70 741.8 million), and loans and advances to customers after provision for loan impairment (by 2.7% or by RUB 10 098.3 million to RUB 378 346.9 million).
- Share of liquid assets6 accounted for 34.9% of total assets as of March 31, 2013 compared to 34.8% as of December 31, 2012 due to a 40.2% increase in liquid securities7.
- Loans and advances to customers before deduction of provision for loan impairment reached RUB 398 388.8 million as of March 31, 2013, an increase by 2.4% (or by RUB 9 258.2 million) compared to the end of 2012, primarily due to the growth of the retail loan portfolio (an increase by 6.9% or by RUB 8 749.0 million to RUB 135 684.9 million), and loan portfolio of small and micro business (+7.5% or RUB 931.4 million). The retail portfolio expanded primarily due to unsecured lending products — consumer loans (+10.3% or RUB 5 858.6 million), and credit cards and overdrafts (+22.0% or RUB 1 675.0 million).
- The loan portfolio quality continued to improve. The share of loans individually determined to be impaired (in total gross loan portfolio) amounted to 5.3% as of 31.03.2013, down by 0.2 percentage points compared to 5.5% as of 31.12.2012.
- Release of provision for loan impairment during three-month period of 2013 in amount of RUB 553.9 million (compared to charge of RUB 521.2 million in the first quarter of 2012) was caused by partial redemptions of problem loans, as well as improvement in the quality of performing loan portfolio together with the high quality of new loan volumes.
- Thus, balance sheet provision for loan impairment decreased by 4.0% to RUB 20 041.9 million as of 31.03.2013 in 1Q13, compared to RUB 20 882.0 million as of 31.12.2012. Coverage ratio of impaired loans remains at a conservative level (94.9% as of 31.03.2013).
- Customer accounts as of the end of the first quarter rose to RUB 429 272.4 million, up by 7.4% (or by RUB 29 508.4 million) compared to RUB 399 764.0 million as of 31.12.2012, primarily due to the positive dynamics of current/settlement accounts of legal entities (growth by 32.3% or RUB 30 905.8 million up to RUB 126 479.7 million) and term deposits of state and public organisations (+ RUB 6 089.0 million up to RUB 6 129.1), as well as due to the rise in current/demand accounts and term deposits of individuals (by 3.8% and 7.6% respectively). Current/settlement accounts of legal entities performed positively against the decrease in term deposits of legal entities (down 29.7% or RUB 21 460.7 million compared to the end of 2012), which is the result of the replacement of expensive term deposits with cheaper current accounts.
- Loan-to-deposit ratio amounted to 92.8% as of 31.03.2013, down by 4.5 percentage points compared to year-end 2012.
- In comparison with the figure for year-end 2012, term borrowings from the Parent bank grew by 3.5% to RUB 42 221.8 million due to prolongation of contracts. Therefore, the share of term borrowings from the Parent bank in total liabilities rose to 7.9% as of 31.03.2013, up by 0.2 percentage points compared to year-end 2012.
Return on equity and capital
- Return on equity (ROE) before tax8 increased by 6.3 percentage points to 28.9% compared to 22.6% as of 31.12.2012. Return on equity (ROE) after tax9 increased by 5.3 percentage points to 22.9% as of the end of first three months of 2013 (compared to 17.6% as of 31.12.2012) due to higher net profit.
- Bank’s equity amounted to RUB 112 987.1 million as of 31.03.2013, increased by 5.2% (or RUB 5 535.9 million) compared to RUB 107 451.2 million as of 31.12.2012 due to the received during first quarter of 2013 total comprehensive income.
- The total capital adequacy ratio according to Basel II remained almost unchanged in comparison with the figure for year-end 2012 and amounted to 19.3% as of 31.03.2013.
- The capital adequacy ratio (calculated in accordance with the CBR, N-1) decreased to 13.3% as of 01.04.2013, down by 0.2 percentage points compared to 13.5% as of 01.01.2013, primarily due to change in CB RF requirements to calculation of market risk.
ZAO Raiffeisenbank is a subsidiary of Raiffeisen Bank International AG. Raiffeisenbank ranks 12th among the Russian banks in terms of assets, based on Q1 2013 results (Interfax-CEA). According to the same Interfax-CEA data, ZAO Raiffeisenbank ranked 5th in terms of liabilities of individuals and 10th with regard to consumer lending.
Raiffeisen Bank International AG (RBI) regards both Austria, where it is a leading corporate and investment bank, and Central and Eastern Europe (CEE) as its home market. In CEE, RBI operates an extensive network of subsidiary banks, leasing companies and a range of other specialized financial service providers in 17 markets. RBI is the only Austrian bank with a presence in both the world’s financial centres and in Asia, the group’s further geographical area of focus. In total, about 60,000 employees service some 14.2 million customers through more than 3,100 business outlets, the great majority of which are located in CEE. Raiffeisen Bank International is a fully-consolidated subsidiary of Raiffeisen Zentralbank Oesterreich AG (RZB). RZB indirectly owns around 78.5 per cent of the common stock, the remainder is in free float. RBI’s shares are listed on the Vienna Stock Exchange. RZB is the central institution of the Austrian Raiffeisen Banking Group, the country’s largest banking group, and serves as the group head office of the entire RZB Group, including RBI.
1 Calculated by subtracting from «Operating income» the following items: «Provisions for loan impairment», «Provisions for credit related commitments», «Provisions for investment securities held to maturity».
2 Including net interest income from derivative financial instruments.
3 Excluding net interest income from derivative financial instruments.
4 Including net interest income from derivative financial instruments
5 Trading result includes: losses net of gains from trading securities, gains less losses from other securities at fair value through consolidated profit or loss, gains less losses/(losses, net of gains) from redemption of investment securities available for sale, gains less losses from trading in foreign currencies, unrealized gains less losses/(losses, net of gains) from derivative financial instruments, realized gains less losses from derivative financial instruments (excluding net interest income on derivatives), foreign exchange translation (losses, net of gains)/gains, net of losses, ineffectiveness from the hedge accounting.
6 Liquid assets are calculated as the sum of the following items: cash and cash equivalents; due from other banks, repurchase receivables, trading securities, other securities at fair value through consolidated profit or loss, investment securities available for sale.
7 Liquid securities include repurchase receivables, trading securities, other securities at fair value through consolidated profit or loss, investment securities available for sale.