OREANDA-NEWS. November 03, 2009. Net income increased by 64% y-o-y to RUR 589 million

Operating income increased by 62.5% y-o-y to RUR 2 624 million

Capital adequacy ratio (Basel) stands firm at 21.4%

Customer deposits went up by 12% to RUR 13.9 billion as compared with YR2008

Level of NPLs went down from 6.6% as at 2Q2009 to 4.8% as at 3Q2009

Level of LLP increased from 4.1% as at the year end to 7.2% as at 3Q2009

Cost/Income went down from 53% as at the year end to 33% as at 3Q2009

Overview of Financial Results
Despite the challenging operating environment LOCKO-Bank delivered solid results in 3Q2009. The Bank reported net income of RUR 589 million up 64% versus RUR 359 million as at 3Q2008. Operating income demonstrated 62.5% growth up to RUR 2.6 billion compared to RUR 1.6 billion for the same period last year with significant gains being generated on financial instruments at fair value (RUR 1.1 billion).

Operating expenses less loan loss provisions (LLP) went down by 11% to RUR 860 million in 3Q2009 compared with the same period last year primarily as a result of LOCKO’s optimization efforts. The Bank managed to minimize expenses on employee compensation and occupancy. In the meantime, LOCKO-Bank considerably increased LLPs from RUR 422 million as at 3Q2008 to RUR 1.5 billion as at 3Q2009 reflecting on the continued weakness in the economy.

Total assets declined by 7% to RUR 30.7 billion compared with 2008 results. Gross loan portfolio also went down by 6.6% to RUR 20.8 billion during 9М 2009. Current accounts and deposits from customers exhibited a considerable growth of 12% to RUR 13.9 billion as at 3Q2009. Consequently, Loans to Deposits ratio decreased from 179.7% as at the year end to 149.7% as at 3Q2009. LOCKO-Bank also adheres to maintain strong liquidity position with 15% share of cash and cash equivalents and 15% of assets being made up of bonds included to the CBR’s Lombard list.

Key Performance Indicators
During 3Q2009 LOCKO-Bank improved almost all major performance indicators. Yet, net interest margin evidenced a decrease from 6.3% to 5.4% over the last 12 months due to reduction in the Bank’s total loan portfolio. However, with considerable 62.5% y-o-y growth of the operating income as well as sufficient reduction of the cost to income ratio from 53% as at the year end to 32.8% as at 3Q2009 the Bank managed to improve its profitability with ROAE growing from 9.9% to 15.9% and ROAA from 1.3% to 2.5% over the last 9 months. Capital adequacy ratio further rose from 20.4% to 21.4% during 2009.

Share of NPLs (impaired loans with 30+ day overdue or evidence of financial weakening) went up from 3.7% as at the year end to 4.8% as at 3Q2009 reflecting on the general market tendency. Nevertheless, NPLs exhibited a negative growth tendency decreasing from 6.6% as at 2Q2009 to the current level of 4.8%. In the meantime, share of the restructured loans went up from 3.6% as at 2Q2009 to 6.8% as at 3Q2009. LLP coverage ratio stood at 149% as at 3Q2009.