OREANDA-NEWS. November 15, 2010. B&N Bank has issued Condensed Interim Consolidated (Unaudited) Financial Information for 6 months ended June 30, 2010, reported the press-centre of B&N Bank.

For the accounting period B&N Bank demonstrated visible progress in its key highlights and was included in TOP-50 Russian banks in terms of its assets.  In particular, as of July 1, 2010 the Bank was ranked 42 nd among “Top-200 Russian Banks by Assets”, 16 th among “Top Banks by Retail Deposits” and 5 th among “Top-100 Most Reliable Russian Banks” according to business magazine “Profile”. Moreover, as of July 1, 2010 B&N Bank was included in TOP-30 biggest Russian banks according to CBR Consolidated Statistical Data for major Russian banks.

Total assets of the Bank grew from RUB 85.3 bln. as at the end of 2009 up to RUB 93.3 bln. showing growth over  9%  as compared to insignificant growth of assets for the same period a year earlier (plus 0,2%). Increase in assets is basically driven by expansion of trading security portfolio (plus 21%) and 18% growth of the loan book. Meanwhile, progress in the loan portfolio is related to increase in corporate lending activity.

Level of NPL 90plus  (calculation refers to all overdue payments and the principal amount of the loan) as of July 1, 2010 stood at 9.7% of the total loan portfolio being an evidence of credit risk stabilization (9.6% as at the end of 2009). Moreover, currently this ratio has downward trend declining to 8.4% as at October 1, 2010.

Customer accounts amounted to RUB 77.2 bln. and demonstrated 17% growth as compared to only 5% growth for the same period a year earlier. That said, retail deposits prevail in the structure of the customer accounts making more than 70%.

Financial result of the Bank was negative and amounted to RUB 761 mln. Current pressure on the Bank’s earnings comes from sustaining of loan loss provisions at adequate level to neutralize credit risks. Among other negative factors there is increase in interest expenses which was driven by significant share of retail deposits drawn at rather high market rates.

Interest income of the Bank increased up to RUB 5 bln. (plus 11%), however due to increase in interest expense by 34%, net interest income (before provision for impairment losses) declined from RUB 1.7 bln. to RUB 1.2 bln. Net non-interest income remained nearly unchanged and totaled RUB 672 mln. Likewise, the Bank’s earnings were impacted by increased operating expenses due to administrative costs (launch of new IT platform and investments in branch network).  

In 1H2010 capital adequacy ratio (Basel) decreased from 14.1% to 11.27% (Tier 1 capital – from 9.7% to 7.55%) in response to growth in risk-weighted assets, though, in general, the Bank’s capitalization remains at comfortable level. In 1Q2010 the Bank’s capital was increased by a subordinated loan to the amount of USD 50 mln. from the related party.   

Liquidity remains high and the corresponding CBR prudential ratios are fully satisfied: Н2 “instant liquidity” – 83.67% at min. 15%; Н3 “current liquidity” – 112.62% at min. 50%; Н4 “long-term liquidity” – 99.25% at max. 120%.

As of July 1, 2010 the Bank’s branch network contained 121 offices: 29 branches, 90 subbranches and 2 rep offices. Throughout the first half of 2010 the Bank opened 7 new offices: 5 subbranches in Yekaterinburg, Kaliningrad and Moscow regions, and 2 operating offices in Ivanovo and Vladimir.

Thus, we consider that the Bank has successfully overcome the negative influence of the global economic turbulence on its key financial highlights due to clear-cut strategy and effective risk management system. In case of the further stabilization of credit risk and efficient management of interest margin by means of lowering deposit rates, B&N Bank expects to gain profit as at the end of 2010.

In the meantime, B&N Bank has demonstrated noticeable reduction of loss in its 3Q2010 financial statements, prepared according to Russian Accounting Standards (RAS). Pre-tax profit amounted to RUB 517 mln., that enabled the Bank to cover the loss of the 1 st half of 2010 (RUB 551 mln.) As a result, the net loss for 9 months 2010 made only about RUB 34 mln.