OREANDA-NEWS. September 13, 2011. Renaissance Credit, one of Russia’s leading consumer finance banks, today announced its International Financial Reporting Standards (IFRS) financial results for the first half of 2011.

The Bank’s net profit for the first six months of 2011 was RUB 768.8 mn.

Operating income1 grew over 2.2 times versus the same period last year, and amounted to RUB 4 bn (RUB1.8 bn for the same period in 2010). The growth was principally due to the increase in the share of high-margin products, improvement of the credit portfolio quality, and a decrease in funding cost.

During the first half of 2011, Renaissance Credit issued consumer loans to individuals amounting to RUB 17 bn, which is double the figure for the same period last year (RUB 7.2 bn). The Bank’s total credit portfolio grew by 12.5% to RUB 36.5 bn.

Credit portfolio quality remained relatively high throughout the first half of 2011. Non-performing loans (more than 90 days past due) amounted to 5.4% of the gross loan portfolio at 30 June 2011 (6.3% as at 31 December 2010, 11.1% as at 30 June 2010).

The proportion of high-margin products in the portfolio – cash loans and credit cards – grew from 61% as at 31 December 2010 to 68.8% as at 30 June 2011.

In 2011, Renaissance Credit continued to pursue its funding strategy aimed at maintaining a diversified base of funding sources. During the first six months of 2011, retail deposits increased by 22% to RUB 18.6 bn and constituted 58% of the Bank’s attracted capital as at 30 June 2011.

In June 2011, the European Bank for Reconstruction and Development (EBRD) selected Renaissance Credit as its partner for the development of consumer credit in Russia and extended the Bank a credit line of RUB 2.2 bn over three and a half years.

In August 2011, the Bank successfully returned to the Russian debt capital markets after a three-year hiatus, issuing 3 million exchange-traded bonds with a total value of RUB 3 bn for open subscription.

Thecost of funding2 fell from 12.2% as at 31 December 2010 to 10.7% as at 30 June 2011 as a result of more effective portfolio management and improvements on capital markets.

TheRenaissance Credit sales network comprised 93 branch offices and 14,760 points of sale in partner retail networks at 30 June2011, an increase of more than 30% in six months. The branch network expanded with the opening of new offices in the most economically developed regions of Russia.

The Bank’s capital grew 6.8% to RUB 12.1 bn in the first half of 2011. The capital adequacy ratio is 27%, which opens the possibilities for strategic development in the coming years and investment in new fields of operations.

In March 2011, ratings agencies Fitch and Standard & Poor’s raised the rating of Renaissance Credit to “B,” with an outlook of “stable.”

“Today Renaissance Credit is one of the recognized leaders in the Russian retail credit market, demonstrating consistently high results. We achieved our goals through a business model and a development strategy focused on increasing business effectiveness. In the next three years we intend to maintain a leading position in the Russian consumer credit market and continue to focus on three primary goals: tight control over the cost of funding, optimization of operating expenses and formation of high-quality assets,” said Alexey Levchenko, Chief Executive Officer or Renaissance Credit.