UniCredit Bank Financial Results for the first half of 2016: net profit increased by 5.5% up to RUB 8.27 bn
- Net profit increased by 5.5% Y/Y
- Capital increased by 12.7% Y/Y
- Solid balance sheet’s structure
- Solid contribution from all business segments
AO UniCredit Bank’s consolidated financial statements for the six-month period ended 30 June 2016 according to the International Financial Reporting Standards (IFRS):
- Total assets: RUB 1 271.07 billion (+2.9% Y/Y)
- Total Equity: RUB 174.36 billion (+12.7% Y/Y)
- Total customers deposits: RUB 865.83 billion (+6.9% Y/Y)
- Net loans to customers: RUB 763.18 billion (-4% Y/Y)
- Net profit: RUB 8.27 billion (+5.5% Y/Y)
- Operating income: RUB 27.06 billion (+12.3% Y/Y)
Mikhail Alekseev, CEO of UniCredit Bank, commented: «The situation in the banking sector is still far from ideal — asset quality, low growth rates, and high volatility remain pressing problems for the Russian financial system. Therefore, the positive results of UniCredit Bank are especially valuable for us — in the first half of the year we were able to exceed significantly the planned figures for profitability — net profit reached 8.27 billion rubles, while maintaining a conservative and prudent approach on cost of risk and focusing primarily on the quality of the loan portfolio. In addition, the Bank showed strong growth in operating income, while the cost/income ratio remained at traditional low level. The second half of 2016 is expected to be quite challenging, but I am confident that our professional team, high-quality customer base and highly effective business model will allow us to confirm a strong position in the financial services market».
AO UniCredit Bank in the first half of 2016 successfully kept its position as the leading international bank in Russia with total assets amounting to RUB 1 271.07 billion (+2.9%, +RUB 35.52 bn Y/Y).
Thanks to contribution of all business segments of the Bank in the first half of the year, the net profit of the Bank increased by 5.5% Y/Y up to RUB 8.27 billion (+RUB 0.43 bn Y/Y) while the net profit for the second quarter of 2016 increased by 33.5% Y/Y and reached RUB 4.6 billion (+RUB 1.15 bn Y/Y). Return on equity (ROE) remained at 9.8%.
Net interest income for the first half of the year increased by 8.6% Y/Y up to RUB 21.57 billion (+RUB 1.7 bn Y/Y) thanks to the solid commercial performance both in loans and deposits portfolio especially in the CIB business segment. Net interest income for 2Q2016 also increased up to RUB 10.75 billion (+11.8%, +RUB 1.14 bn Y/Y). Net fee and commission income greatly increased by 54% Y/Y up to RUB 2.87 billion (+RUB 1.00 bn Y/Y). Net fee and commission income for 2Q2016 also increased up to RUB 1.59 billion (+58.8%, +RUB 0.59 bn Y/Y).
As a result, operating income grew by 12.3% up to RUB 27.06 billion (+RUB 2.97 bn Y/Y). The main contribution came from CIB that demonstrated growth of operation income from its activity by 22.0% up to RUB 18.32 billion. Operating income for 2Q2016 increased up to RUB 14.23 billion (+14.4%, +RUB 1.79 bn Y/Y).
During the first six months of 2016 the Bank strictly controlled its costs according to its long term strategy. The operating expenses comprised RUB 8.76 billion (+19.6% Y/Y) mostly due to costs attributed to other administrative expenses and other provisions. Nevertheless, thanks to strict cost management procedures cost/income ratio stays at the excellent level of 32.4%.
Total Equity increased up to RUB 174.36 billion (+12.7%, +RUB 19.66 bn Y/Y) due to growth of retained earnings (+RUB 15.95 bn Y/Y). With a solid capital base, the bank keeps a comfortable capital adequacy ratio of 14.8%, well above the regulatory requirement.
UniCredit Bank’s commercial network performed well in the first half of 2016, however dynamics of its loan portfolio was in line with the situation in the market. Gross loans to customers amounted to RUB 802.63 billion (-2.2% Y/Y). Net loans to customers amounted to RUB 763.18 billion (-4.0% Y/Y). Total gross loans to corporate customers (including reverse repurchase agreements and lease receivables) remained stable at RUB 678.88 billion. Retail portfolio (including SME) amounting to RUB 123.75 billion (-12.7% Y/Y). The quality of loan portfolio remains the main focus for UniCredit Bank. As of the end of the first half of 2016 the share of impaired loans in total gross loan portfolio was 7.6%, reflecting the economic and macro scenario, nevertheless, assets quality of the Bank remains one of the best in the market.
During the reporting period UniCredit Bank continues to maintain well diversified, balanced and independent funding sources. Total customers deposits increased by 6.9% (+RUB 56.09 bn Y/Y) and amounted to RUB 865.83 billion, with total corporate funds amounted to RUB 649.66 billion (+0.7%, +RUB 4.81 bn Y/Y), and retail funds (including SME) increased by 31.1% up to RUB 216.17 billion (+RUB 51.28 bn Y/Y). The loan/deposits ratio (incl. debt securities issued) as of the end of the first half of 2016 was 85.9% confirming the Bank’s sound liquidity position.
UniCredit Bank Russia serves over 1,750,000 customers as well as around 27,000 small, medium and large enterprises through its network of 101 offices (including the Representative Office in Minsk).