Russian Agricultural Bank (RusAg, the Group) announces its audited consolidated financial results for FY 2020 according to International Financial Reporting Standards (IFRS).
2020 is seen as one of the most demanding years in recent history for both Russia and the entire world. Operating in a new normal against unprecedented challenges of the COVID-19 pandemic and its consequences, the Group maintained its stability, ensured the achievement of all key targets and even outperformed the market in terms of corporate and retail lending as well as retail accounts.
Following the results of 2020, RusAg increased its lending to the agricultural sector. The Bank’s agribusiness loan portfolio increased by RUB 301 billion (+22%) and amounted to RUB 1.673 trillion. Maintaining a primary focus on small and medium businesses (SMEs), the Bank increased its lending to agribusiness SMEs by 24% to RUB 318 billion.
In 2020 RusAg made available more than RUB 79 billion in loans under a rural mortgage programme for rural housing construction and purchase, becoming a leader in rural mortgage lending by volume and helping more than 40,000 families improve their living conditions.
“In addition to reinforcing our status as the core bank for Russian agribusinesses and rural areas, we continued and accelerated the transformation of our IT infrastructure. Growing customer demands for digital transformation, faster service and better quality acted as the key drivers of our Group’s development in 2020. We expanded the range of our remote banking services, providing sustainable financing to SMEs throughout the pandemic. By launching Svoe Fermerstvo (My Farming) ecosystem, we made the relevant resources and technologies available to farmers for business development. With our marketplace Svoe Rodnoe (A World of My Own), we were able to open up new opportunities to help develop sales channels for farm products. We also widened our product offer for individuals to ensure that our customers can use fully digitised products in our remote banking service system, and we were the first bank in Russia to introduce a fully functional mobile electronic signature in that system. Our 2020 performance results show how successful our Group was in innovative development, delivering higher quality in our growing loan portfolio, a stronger resource base and capital, efficient cost management and earning a record profit that topped RUB 13 billion,” Kirill Levin, First Deputy Chairman of the Board at RusAg, said.
The Group’s 2020 gross loan portfolio grew 20.2% (+RUB 499.8 billion) reaching RUB 2.971 trillion. Corporate loans (including loans to customers measured at fair value through profit or loss) rose by 20.5% (+RUB 409.5 billion) from YE2019 and totaled RUB 2.407 trillion. Retail loans went up 19.1% (+RUB 90.4 billion) to RUB 563.4 billion.
The Group’s assets as at 31 December 2020 stood at RUB 3.820 trillion, showing a growth of 18.8% over the year (+RUB 604 billion).
Over 2020 deposits and customer accounts grew by RUB 376.2 billion (+15.1%) and added up to RUB 2.862 trillion. By the end of the year, corporate customer accounts amounted to RUB 1.520 trillion, showing an increase of 17.4% (+RUB 225.3 billion). Retail deposits and customer accounts gained RUB 151 billion (+12.7%) compared to the beginning of the year, reaching RUB 1.342 trillion.
Throughout the year in review, the Group was successful in maintaining an optimal structure of liabilities and a comfortable liquidity position. The share of customer funding in total liabilities amounted to 80%. The loan-to-deposit (LTD) ratio as at 31 December 2020 stood at 103.8%.
2020 net interest income was RUB 79.5 billion (up 3% from RUB 77.2 billion in 2019), while net fee and commission income (RUB 22.3 billion) grew 7.9% (from RUB 20.7 billion in 2019).
Net interest margin stood at 2.4%. Cost/income ratio (operating expenses divided by net operating income (before allowance for credit losses)) as at 31 December 2020 was 55.7%.
In 2020 the Group earned a record RUB 13 billion in net profit (3.2 times compared to 2019), driven by ongoing improvements in asset quality, operating income growth and efficient cost management.
As at 31 December 2020, the Group’s equity (IFRS) amounted to RUB 234.7 billion, showing an increase of 17.8% over the year and resulting from additional RUB 30.5 billion capitalization of RusAg in 2020.
Capital adequacy ratio (N1.0) stood at 14.4% as at 1 January 2021.
“For 20 years, RusAg has been a systemically important credit institution and the core bank for agribusiness. Not only do we contribute to making the agricultural sector more investment-attractive and engage in delivering major projects, we are also involved in addressing the most critical social issues, such as supporting employment levels, improving the quality of rural life and developing rural and agro tourism. In 2020 we formulated and set out to implement our strategic concept, More Than Just A Bank, which is expected to create an all-embracing system for small agribusinesses and the people who work and live in the countryside. It will cover such areas as business development, employment, professional development, living conditions that have to be put in place and further improved, as well as training, self-development, social and practical day-to-day issues. All areas of support will be based on modern technological platforms,’ Kirill Levin, First Deputy Chairman of the Board emphasized.