Russian Agricultural Bank Group (RusAg, the Group) announces its interim condensed consolidated financial results for 6M 2020 according to International Financial Reporting Standards (IFRS).
“The Group maintains a positive trend in its key performance indicators. This is largely due to the business profile of RusAg, which is unique for the Russian banking sector, as well as our specialization in working with agribusiness sectors, which demonstrated high resilience during the pandemic,” Kirill Levin, First Deputy Chairman of the Board at RusAg, said.
In the reporting period the Group continued its work aimed at building a high-quality loan portfolio, ensuring the necessary funding for its activities from the target client segments and achieving the planned indicators of operational efficiency and profitability.
In H1 2020 the Group’s gross loan portfolio went up 7% (+RUB 172 billion) reaching RUB 2.643 trillion. Corporate loans (including loans to customers measured at fair value through profit or loss) rose by 8.2% (+RUB 164.2 billion) from YE2019 and totaled RUB 2.162 trillion. Retail loans grew by 1.7% (+RUB 7.8 billion) to RUB 480.8 billion from YE2019.
As at 30 June 2020 the Group’s assets totaled RUB 3.293 trillion. In H1 2020 the Group’s assets grew 2.4% (+RUB 77.2 billion).
Deposits and customer accounts in 6M 2020 grew by 1.8% (+RUB 44 billion) and added up to RUB 2.530 trillion. As at 30 June 2020, corporate customer accounts amounted to RUB 1.284 trillion, having decreased by 0.8% (-RUB 10.7 billion). The decline was not critical; funding of the loan portfolio is provided by RusAg in full, which includes using the funds raised as part of state support measures from the Bank of Russia. Corporate deposits, excluding state organizations, increased by RUB 5.3 billion (+0.6%) and amounted to RUB 916.9 billion. Retail deposits and customer accounts grew 4.6% (+RUB 54.7 billion) from YE2019 and amounted to RUB 1.246 trillion. As a result of the measures taken by the Group aimed at reducing the cost of funding, including through the development of popular digital client services, the balances on the current and settlement accounts of the Group's clients increased in the reporting period by 29.7% to RUB 443.7 billion.
The share of customer funding in the RusAg’s total liabilities stood at 81.8%. The Group’s loan-to-deposit (LTD) ratio stood at 104% as at 30 June 2020.
In H1 2020 net interest and fee and commission income grew by 7.5% to RUB 47.8 billion from RUB 44.5 billion year-on-year. Net interest margin stayed flat year-on-year. In the reporting period, the Group’s Cost/income ratio (operating expenses divided by net operating income (before allowance for credit losses)) stood at 56%.
In H1 2020 the Group earned a net profit of RUB 1.4 billion.
The Group’s equity amounted to RUB 198.6 billion as at 30 June 2020.
The Group’s capital adequacy ratio (N1.0) (under the Bank of Russia requirements) stood at 14.4% as of 1 July 2020.
“The measures taken by the Bank of Russia have stabilized the situation in the banking industry. The non-application of macro prudential surcharges to a number of loan categories and the postponement of the accrual of provisions for restructured loans to certain categories of borrowers allowed avoiding additional pressure on the capital of Russian banks and maintaining sufficient lending potential, Kirill Levin said. – In the situation that developed in the 1st half of the year, the Group demonstrated a flexible product and financial policy. We were able to effectively support our clients through our own anti-crisis programs, as well as through measures and recommendations of the government and the regulator. I am confident that this support will allow our clients not only to maintain financial stability, but also to create a basis for future growth.”