ZAO Raiffeisenbank results for 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.
«2013 was a challenging year for the economy as a whole, and for the banking sector in particular. Nevertheless, Raiffeisenbank achieved good results in this environment, which proves the efficiency of our business model, - said Sergey Monin, Chairman of the Management Board of ZAO Raiffeisenbank. «In previous year we not only earned substantial profit, but also demonstrated high return on equity».
Profit after tax was RUB 20 381.0 million, an increase of 14.2% compared to RUB 17 854.1 million in 2012.
Operating income before provisioning rose by 14.9% to RUB 51 497.6 million compared to RUB 44 801.4 million obtained in 2012primarily due to higher net interest income before provisioning for impairment losses and net fee and commission income.
Net interest income before provisioning for impairment losses increased by 17.7% or RUB 5 403.9 million to RUB 35 882.6 million at year-end due to an increase in interest income on loans and advances to retail customers (+ 36.5%) arising from the growth of retail loan portfolio; interest income on securities portfolio (+19.2%) due to the growth of the securities portfolio; net interest income from derivatives (+ 22.9%) as a result of the expanded volume of operations.
Net fee and commission income rose by 18.6% or RUB 1 659.2 million to RUB 10 583.3 million in 2013 compared to RUB 8 924.1 million in 2012 primarily due to higher net commissions on operations with plastic cards (+24.9%) resulting from the increased number of cards serviced, and the growth in insurance commission income (+53.0%) caused by the increase of sales of retail products.
Trading result increased by 4.4%, or RUB 178.3 million, to RUB 4 244.3 million at the end of 2013 compared to RUB 4 066.0 million in 2012. This growth was due to a one-off effect from the sale of investment securities available for sale in the amount of RUB 1 032.5 million in 2013. Among growth constraints there were net losses from other securities at fair value through profit or loss amounting to RUB 19.4 million (compared to net gains in amount of RUB 213.9 million in 2012) resulting from negative revaluation of the portfolio at the end of 2013.
Administrative and other operating expenses rose by 11.3% to RUB 23 737.2 million in 2013. The main drivers of growth were staff costs (+ 11.8% or RUB 1 264.6 million to RUB 11 954.9 million) resulting from increased salaries; IT services (+37.0% or RUB 390.9 million to RUB 1 447.0 million) due to the implementation of new IT projects and increased service costs related to completed projects; advertising and marketing (+49.8% or RUB 362.0 million to RUB 1 089.6 million) because of active use of advertising tools.
The cost optimisation policy pursued by the Bank made it possible to reduce the cost/income ratio by 1.5 percentage points in 2013 to 46.1% at year-end compared to 47.6% at end-2012.
Return on equity continued to improve in 2013. Return on equity after tax increased by 0.7 percentage points to 18.3% compared to 17.6% at the end of 2012. Return on equity before tax demonstrated similar dynamics with 0.5 percentage points rise to 23.1% compared to 22.6% in 2012.
Assets of the Bank increased to RUB 711 372.1 million (up 11.6% or RUB 74 149.9 million compared to the end of 2012) primarily due to the 17.4% rise in loans and advances to customers (net of provisions) to RUB 432 208.1 billion and increased liquid assets (up 4.5% to RUB 231 562.0 million).
The Bank continues to maintain considerable liquidity cushion. Liquid assets increased by 4.5% compared to the end of 2012 to RUB 231 562.0 million primarily due to the 34.2% growth in liquid securities to RUB 67 266.3 million. The minimum share of liquid assets in total assets of the Bank was 32.4% during 2013.
Loan portfolio (before deduction of provisions for loan impairment) rose 15.5% year-on-year to RUB 449 492.9 million due to increased portfolios of retail segment (+43.1% to RUB 181 691.5 million), medium business (+53.3% to RUB 16 530.0 million), and small and micro business (+ 43.0% to RUB 17 789.9 million).
The growth of retail loan portfolio in 2013 was based on increase of portfolios in ofl retail products. In particular, the strongest growth in absolute figures was achieved by consumer loans (+RUB 32 911.2 million to RUB 89 798.8 million) and car loans (+ RUB 9 964.3 million to RUB 38 350.5 million).
The loan portfolio of the small and micro business segment continued to demonstrate high growth rate (+43.0%) in 2013 as a resulting from development of service quality and efficiency.
Corporate loan portfolio remained stable at RUB 249 962.7 million as of 31.12.2013 (up 0.1% compared to the end of 2012).
The quality of the loan portfolio improved in 2013 evidenced by lower share of non-performing assets. The share of the loans individually determined to be impaired decreased by 0.8 percentage points to 4.7% as a result of loan portfolio growth with its quality maintained.
During 2013 there was the charge of provision for loan impairment in amount of RUB 2 175.7 million compared to charge in amount of RUB 882.5 million in 2012. The largest charge of provision was made in the retail segment (RUB 1 727.6 million) as a result of the fast growth in the retail loan portfolio with the high portfolio quality maintained.
Balance sheet provisions for loan impairment decreased by 17.2% to RUB 17 284.8 million compared to RUB 20 882.0 million at the end of 2012 primarily due to amounts written off as uncollectible.
LIABILITIES: CUSTOMER ACCOUNTS - THE MAIN SOURCE OF FUNDING BASE
The share of the term borrowings from parent bank in total liabilities decreased from 7.7% at 31.12.2012 to 5.6% at the end of 2013 due to contractual repayments.
Customer accounts rose by 15.5% year-on-year to RUB 452 472.8 million at 31.12.2013 (including accounts of individuals of RUB 261 357.7 million, accounts of legal entities of RUB 189 405.6 million, and state and public organisations accounts of RUB 1 709.5 million). Current accounts and term deposits of individuals rose to 57.8% of total customer accounts.
Current accounts demonstrated positive performance in all segments in 2013: legal entities +16.5%, individuals +11.2%, state and public organizations +106.9%. Similarly, term deposits rose across all segments, with the highest growth in term deposits of individuals (up 21.6% or RUB 27 383.1 million to RUB 154 147.8 million) compared to the end of 2012.
Customer accounts remained the key source for the bank's funding: at the end of 2013 their share in total liabilities of the Bank was 76.0% (up 2.0 percentage points compared to 74.0% as of 31.12.2012).
Loan-to-deposit ratio was 99.3% at the end of 2013 remaining almost unchanged from the end of 2012 due to similar growth rates of customer accounts and loan portfolio.
The Bank's equity rose 7.8% year-on-year to RUB 115 784.3 million at the end of 2013 due to the 9.8% growth in Tier-1 capital resulting from positive performance of the retained earnings and other reserves.
Capital adequacy ratio (N-1, calculated in accordance with CBR requirements) remained stable at 13.5% as of 01.01.2014 showing nearly no changes compared to 01.01.2013.
Total capital adequacy ratio according to Basel II was 19.5% at the end of 2013 remaining almost unchanged from the end of 2012 (up 0.2 percentage points) because of the increase in risk-weighted assets. As of 31.12.2013, share of Tier-1 capital reached 98.6% of the Bank's total equity (Basel II), up 0.8 percentage points compared to the end of 2012.
ZAO Raiffeisenbank is a subsidiary of Raiffeisen Bank International AG. Raiffeisenbank ranks 11th among the Russian banks in terms of assets, based on 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 specialised financial service providers in 15 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, around 58,000 employees service about 14.6 million customers through more than 3,000 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 holds around 60.7 per cent of the shares, the rest account for the 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.
 Calculated on the basis of IFRS financial statements as the sum of net interest income before provisioning for impairment losses, net fee and commission income, trading result, gains from the sale of loans, other operating income and share of results of associates.
 In accordance with the CBR methodology.
 Including net interest income from derivative financial instruments.
 Including net interest income from derivative financial instruments.
 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 disposal 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 from derivative financial instruments), foreign exchange (losses, net of gains)/gains, net of losses, ineffectiveness from hedge accounting.
 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.