IFRS Financial Statements

Russian Agricultural Bank announces its 9M 2020 IFRS results

Russian Agricultural Bank Group (RusAg, the Group) has announced its interim condensed consolidated financial results for 9M 2020 according to International Financial Reporting Standards (IFRS).

“The first 9 months of 2020 were a period of flexible and effective decision-making for the Russian Agricultural Bank Group, which was reflected in the progressive development of the Group’s business in key market segments and the achievement of a positive financial result. We ensured the growth of all planned indicators, increased corporate and retail loan portfolios, improved their quality, strengthened the resource base, increased capital and earned a record in the Group's history profit of RUB 9.9 billion,” Kirill Levin, First Deputy Chairman of the Board at RusAg, said.

In 9M 2020, the Group’s gross loan portfolio went up 13.9% (+RUB 344 billion) reaching RUB 2.815 trillion. Corporate loans (including loans to customers measured at fair value through profit or loss) rose by 15% (+RUB 298.8 billion) from YE2019 and totaled RUB 2.297 trillion. Retail loans grew by 9.6% (+RUB 45.2 billion) to RUB 518.3 billion.

The Group’s assets at the end of September 2020 amounted to RUB 3.471 trillion, an increase of 7.9% (+RUB 255.3 billion) over the reporting period.

Deposits and customer accounts in 9M 2020 grew by RUB 148.3 billion (+6%) and added up to RUB 2.634 trillion. As at 30 September 2020, corporate customer accounts amounted to RUB 1.332 trillion, an increase of RUB 37.4 billion (+2.9%) during the reporting period. Retail deposits and customer accounts increased by RUB 110.9 billion (+9.3%) and reached RUB 1.302 trillion in the first 9 months of this year. The balances on the current and settlement accounts of the Group’s clients increased in the reporting period by 44.7% to RUB 494.9 billion.

The share of customer funding in total liabilities stood at 81.1%. The Group’s loan-to-deposit (LTD) ratio stood at 107% as at 30 September 2020.

In 9M 2020, net interest and fee and commission income grew by 4.1% to RUB 73.2 billion from RUB 70.3 billion year-on-year.

Net interest margin stayed flat year-on-year (2.3%). In the reporting period, the Group’s Cost/income ratio (operating expenses divided by net operating income (before allowance for credit losses)) stood at 54% as of 30 September 2020.

In 9M 2020 the Group earned a net profit of RUB 9.9 billion compared to RUB 4.3 billion for the same period in 2019.

As of 30 September 2020, the Group’s equity (IFRS) amounted to RUB 222.6 billion against RUB 199.3 billion at YE2019 – an increase of 11.7%. The growth of the Group’s capital is related to additional capitalization of RusAg in July 2020 in the amount of RUB 20 billion.

Capital adequacy ratio (N1.0) stood at 15.1% as of 1 October 2020.

“RusAg’s support of the national agribusiness has contributed to the outstripping growth rates of the industry, which is showing strong positive dynamics against the background of declining indicators in a number of other sectors of the economy. We have maintained our leading position in agricultural lending, managed to expand the tools aimed at increasing the volume of agricultural exports, and ensured the Bank’s large-scale participation in a number of important target programs, such as rural mortgage,” Kirill Levin, First Deputy Chairman of the Board emphasized.

 

Russian Agricultural Bank announces its H1 2020 IFRS results

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.”


Russian Agricultural Bank announces its 3M 2020 IFRS results

Russian Agricultural Bank (RusAg, the Group) announces its interim condensed consolidated financial results for 3M 2020 according to International Financial Reporting Standards (IFRS).

“RusAg delivers the business model of a universal commercial bank while also functioning as the core industry bank. As in previous years, our key task is support of agribusinesses and rural residents. In Q1 2020 we have increased lending to agribusiness and issuance of state subsidized mortgage loans under the Integrated Rural Territories Development Program. In the current environment, we estimate that most agrarians will face difficulties and lots of them will need support. On the other hand, we can see a few opportunities opening up for agricultural producers. Therefore, we expect demand for lending to rise in the nearest term,” Kirill Levin, First Deputy Chairman of the Board at RusAg, said.

In the reporting period the Group showed upward dynamics across its core businesses ensuring both corporate and retail loan growth, while continuing to build a sizeable and stable funding base. Moreover, the Group has successfully maintained the level of operating efficiency and the bottom-line result.

In Q1 2020 the Group’s gross loan portfolio went up 4.7% (+RUB 116.4 billion) reaching RUB 2.587 trillion. Corporate loans (including loans to customers measured at fair value through profit or loss) rose by 5.6% (+RUB 112 billion) from YE2019 and totaled RUB 2.110 trillion. Retail loans grew by 1.0% (+RUB 4.5 billion) to RUB 478 billion from YE2019.

As at 31 March 2020 the Group’s assets totaled RUB 3.515 trillion. In Q1 2020 the Group’s assets grew 9.3% (+RUB 299.7 billion).

Deposits and customer accounts in 3M 2020 grew by 11.4% (+RUB 282.4 billion) and added up to RUB 2.769 trillion. Corporate customer accounts came in at RUB 1.525 billion, expanding by 17.8% (+RUB 230.7 billion). Retail deposits and customer accounts grew 4.3% (+RUB 51.7 billion) from YE2019 and amounted to RUB 1.243 trillion.

The share of customer funding in the Group’s total liabilities stood at 83.3%. The Group’s loan-to-deposit (LTD) ratio stood at 94% as at 31 March 2020.

In Q1 2020 net interest and fee and commission income grew by 11% to RUB 23.7 billion from RUB 21.4 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 57%.

In Q1 2020 the Group earned a net profit of RUB 618 million.

The Group’s equity amounted to 191.4 billion as at 31 March 2020.

The Group’s capital adequacy ratio (N1.0) (under the Bank of Russia requirements) stood at 14.7% as of 1 April 2020.

“Amid the spread of the pandemic caused the novel coronavirus infection COVID-19, a slump in global energy commodity prices and increased volatility in the global financial markets, the key economic industries have seen the first signs of diminished business activity. In such environment, the Russian Government and the Bank of Russia have worked out a set of measures to ensure comprehensive support of economy, financial sector and individuals. These measures have yielded immediate results, however the size of losses arising from the temporary shutdown of production can be objectively assessed at each stage as the business activity recovers. RusAg, for example, as part of the State subsidized mortgage lending program 2020 reduced interest rates down to 5.9% p.a.”, Kirill Levin said.

According to Kirill Levin, RusAg came up to this instability period well prepared, continuing uninterrupted operations and offering its clients the full range of traditional banking services while also developing hi tech remote banking services. “Despite the fact that Russian agrarians appear to be less vulnerable to the negative effects of the current crisis as compared to a number of other sectors we will be able to gauge such impact on our clients at later stages. We will adjust our business plans based on such assessments. Our solid market positions lay the groundwork for further implementation of our strategy with focus on complex support of production and increase in Russian agribusiness exports,” Kirill Levin added.

 


Russian Agricultural Bank announces its FY2019 IFRS results

Russian Agricultural Bank (RusAg, the Group) announces its audited consolidated financial results for FY 2019 according to International Financial Reporting Standards (IFRS).

“For the second consecutive year the Bank showed a positive bottom-line result. In 2019, we earned RUB 4.0 billion, rising 2.6x times y-o-y. I’d like to point out that this result was achieved on the back of consistent and effective work done by the Bank’s team for almost a decade. Over this timeframe, we had multiple focus areas: cleaning up the loan book, developing agribusiness and setting up a technologically advanced retail business. These priority areas required investments. Now, we have made profit, which is obvious for the market players. Just another proof of the quality of our work can be found in credit rating reports issued by Fitch, Moody’s and ACRA”, Kirill Levin, First Deputy Chairman at RusAg, said.

The Group showed strong performance across its core businesses showing both loan growth, while continuing to enhance asset quality, and boosting its funding base via attracting funds from core segments - corporate and retail clients. Moreover, the Group has successfully delivered on the tasks of reinforcing its capital and improving the bottom-line result.

In the reporting period the Group’s gross loan portfolio went up 7.9% (+RUB 180.8 billion) reaching RUB 2.471 trillion. Corporate loans (including loans to customers measured at fair value through profit or loss) rose by 7.7% (+RUB 142 billion) from YE2018 and totaled RUB 1.998 trillion. Retail loans grew by 8.9% (+RUB 38.8 billion) to RUB 473 billion from YE2018.

As at 31 December 2019 the Group’s assets totaled RUB 3.216 trillion. In 2019 the Group’s assets grew 3.2% (+RUB 101 billion).

Active client services development, including Internet and Mobile banking, upgrade of existing and roll-out of new deposit, card and transaction products, supported an increase in the Group’s client and funding base. Adding modern competitive hi tech products to the Bank’s product suite underpinned a larger number of transactions carried out via remote banking channels and a rise in current and settlement account balances.

Deposits and customer accounts in 2019 grew by 2.7% (+RUB 65.1 billion) and added up to RUB 2.486 trillion. As at YE 2019, corporate customer accounts (excluding state and public entities) came in at RUB 911.5 billion, expanding by 15% (+RUB 118.9 billion). To maintain a stable and diversified funding mix the Bank has significantly reduced funding attracted from state and public organizations down to RUB 383.1 billion. Retail deposits and customer accounts grew 15.1% (+RUB 156.6 billion) from YE2018 and amounted to RUB 1.191 trillion. Current and settlement accounts grew 21% up to RUB 342 billion.

In the reporting period, the Group kept a balanced liabilities structure and comfortable liquidity cushion. The share of customer funding in the Group’s total liabilities stood at 82.4%. The Group’s loan-to-deposit (LTD) ratio stood at 99.4% as at 31 December 2019.

In 2019 the Group showed a solid operating profitability boosting its net profit.

Net interest and fee and commission income grew by 10.1% to RUB 97.9 billion from RUB 88.9 billion for the previous year. Net interest margin stayed flat year-on-year.

Net profit for the year grew 2.6x times over 2018 up to more than RUB 4.0 billion. Such improvement in the Group’s bottom line was supported by consistent upgrade of asset quality and a rise of operating income.

The Group has carried out all the measures to replenish the Group’s equity according to plan. In addition to successfully placing perpetual subordinated bond in the local market in the equivalent of RUB 10.5 billion, the Group received share capital injections totaling RUB 29.6 billion. The Group’s equity amounted to 199.3 billion as compared to RUB 151.7 billion at YE2018 (+31.3%).

In 2019 the Group’s capital adequacy ratio (N1.0) was maintained at comfortable levels and stood at 15.1% as of 1 January 2020.

“Russian agribusiness showed outstanding results in 2019 and cemented its positions as one of the flagships among production sectors. Agribusiness exports alongside self-sufficiency and the sector profitability are rising. Modern agribusiness clusters now increasingly resemble hi tech companies, domestic foodstuffs start compete globally. RusAg can be merited for such success”, Kirill Levin said.

Russian Agricultural Bank announces its 9M 2019 IFRS results

Russian Agricultural Bank (RusAg, the Group) announces its interim condensed consolidated financial results for 9M 2019 according to International Financial Reporting Standards (IFRS).

The Group showed positive dynamics across its core businesses – an increase in both corporate and retail loan book, raising liabilities from target customer segments, stronger equity and net profit. In Q3 2019 the Group consistently developed its operations which underpinned an improvement in its key indicators.

In the reporting period the Group’s gross loan portfolio went up 6.9% (+RUB 157.4 billion) reaching RUB 2.448 trillion. Corporate loans (including loans to customers measured at fair value through profit or loss) rose by 7.1% (+RUB 131.7 billion) from YE2018 and totaled RUB 1.988 trillion. Retail loans grew by 5.9% (+RUB 25.7 billion) to RUB 459.9 billion from YE2018.

As at 30 September 2019 the Group’s assets totaled RUB 3.091 trillion. In Q3 2019 Group’s assets grew 3.7% (+RUB 109.5 billion).

Deposits and customer accounts in 9M 2019 grew by 0.5% (+RUB 13 billion) and added up to RUB 2.434 trillion. In Q3 2019 corporate customer accounts expanded 5.4% (+RUB 66.2 billion). Retail deposits and customer accounts grew 9.8% (+RUB 101.9 billion) from YE2018 and amounted to RUB 1.137 trillion. Current and settlement accounts grew 20.5% up to RUB 340.6 billion.

The share of customer funding in the Group’s total liabilities went up to 83.4% from 81.7%. The Group’s loan-to-deposit (LTD) ratio stood at 100.6% as at 30 September 2019.

Net interest income edged down by 1.1% to RUB 54.4 billion year-on-year. The contraction was caused by upward repricing of interest-bearing liabilities amid the market conditions prevailing in H1 2019.

Net fee and commission income for 9M2019 came in at RUB 15.9 billion. The Group’s Cost/income ratio (operating expenses divided by net operating income (before allowance for credit losses) amounted to 51.9% for the reporting period.

In 9M 2019 the Group earned a net profit of RUB 4.3 million as compared to a loss of RUB 9.6 billion in 9M 2018.

As at 30 September 2019 the Group’s equity amounted to 172.8 billion as compared to RUB 151.7 billion at YE2018 (+13.9%) on the back of a RUB 15 billion share capital injection from the federal budget in Q2 2019 and capitalization of net profit in the amount of RUB 4.3 billion.

In 9M 2019 the Group’s capital adequacy ratio (N1.0) was maintained at comfortable levels and stood at 15.02% as of 1 October 2019.

“In Q3 2019 RusAg showed upward dynamics in key business lines. Such results are mostly underpinned by systemic work done by our team in the past few years. The main achievement though is an increase in the agribusiness sector output, its higher marketability and, starting last year, agricultural exports growth. We are proud to see the Bank’s efforts facilitating the growth of efficiency and financial stability of Russian agribusiness. Going forward the Group contemplates increasing long term investments in the sector, expanding its product offering, financial support of agribusinesses whose operations are export-oriented,” Kirill Levin, First Deputy Chairman of the Board of RusAg, said.

 

Russian Agricultural Bank announces its H1 2019 IFRS results

Russian Agricultural Bank (RusAg, the Group) announces its interim condensed consolidated financial results for 6M 2019 according to International Financial Reporting Standards (IFRS).

“In H1 2019 the Bank earned RUB 3.6 billion under IFRS. Such result is underpinned by consistent and thorough work done in recent years. The Bank shows robust performance and delivers on its targets in all key business lines: developing corporate and retail banking, enhancing loan book quality, improving operational efficiency and cost cutting. The main focus though is kept on systemic support to Russian agribusinesses, and starting last year we also prioritize agribusiness exports growth. We look to further upgrade our product offering to match the rising needs of agricultural producers and in every way to help the industry growth via increasing the return on investments in agriculture,” Kirill Levin, First Deputy Chairman of the Board of RusAg, said.

In H1 2019 the Group ensured its loan book growth in line with the business plan while upholding the trend towards asset quality enhancement, built a stable funding base matching its business needs, reinforced its capital and boosted net profit.

In the reporting period the Group’s gross loan portfolio went up 4.8% (+RUB 108.9 billion) reaching RUB 2.339 trillion. Corporate loans (including loans to customers measured at fair value through profit or loss) rose by 5.1% (+RUB 94.4 billion) from YE2018 and totaled RUB 1.950 trillion. Retail loans grew by 3.3% (+RUB 14.5 billion) to RUB 448.7 billion from YE2018.

As at 30 June 2019 the Group’s assets totaled RUB 2.982 trillion which is 4.3% less as compared to YE2018 due to volatility of arbitrage (short term) trading volumes. Such dynamics did not have any impact on the Group’s core client operations on the asset and liabilities side. Deposits and customer accounts respectively dropped in H1 2019 by 3.4% (- RUB 82 billion) and added up to RUB 2.339 trillion caused by a contraction of corporate customer accounts by 11.2% (-RUB 155 billion) down to RUB 1.231 trillion.

Retail deposits and customer accounts grew 7.1% (+RUB 73 billion) from YE2018 and amounted to RUB 1.108 trillion.

The share of customer funding in the Group’s total liabilities went up to 83.2% from 81.7%. The Group’s loan-to-deposit (LTD) ratio stood at 103% as at 30 June 2019.

Net interest income dropped 7.5% down to RUB 34.2 billion year-on-year. The contraction was caused by faster repricing of interest-bearing liabilities amid the market conditions prevailing in H1 2019.

Net fee and commission income grew 3.6% up to RUB 10.3 billion from RUB 9.9 billion year-on-year. The Group’s Cost/income ratio (operating expenses divided by net operating income (before allowance for credit losses) amounted to 56% for the reporting period.

In H1 2019 the Group earned a net profit of RUB 3.6 million as compared to RUB 0.2 billion in H1 2018.

As at 30 June 2019 the Group’s equity amounted to 169.7 billion as compared to RUB 151.7 billion at YE2018 (+11.8%) on the back of a RUB 15 billion share capital injection from the federal budget and capitalization of net profit in the amount of RUB 3.6 billion.

In H1 2019 the Group’s capital adequacy ratio (N1.0) remained at comfortable levels and as of 1 July 2019 (under the Bank of Russia requirements) stood at 14.8%.

Russian Agricultural Bank announces its 3M 2019 IFRS results

Russian Agricultural Bank (RusAg, the Group) announces its interim condensed consolidated financial results for 3M 2019 according to International Financial Reporting Standards (IFRS).

“The updated State Program on Agribusiness Development through 2025 sets forth ambitious tasks to be delivered upon: ensuring the food independence of Russia; the growth of value added of agribusiness output; an increase in agribusiness exports and investments in fixed assets employed in agriculture. The Bank as the core lender to agribusiness acts as the driver behind reaching these targets. Interest rate subsidies on loans remain one of the key tools of the sector support. New lending under the State Program keeps growing, as well as financing of agribusiness as a whole. We will further facilitate agribusiness growth through increasing the efficiency of investments in the industry,” Kirill Levin, First Deputy Chairman of the Board of RusAg, said.

In Q1 2019 the Group showed positive dynamics in corporate and retail lending, and raising customer accounts which underpinned the building of a stable diversified funding base. Moreover, the Group ensured the needed level of operating efficiency and profitability.

In the reporting period the Group’s gross loan portfolio went up 2.8% (+RUB 65 billion) reaching RUB 2.355 trillion. The growth was driven by corporate loans (including loans to customers measured at fair value through profit or loss) which rose by 3.4% (+RUB 63.2 billion) from YE2018 and totaled RUB 1.919 trillion. Retail loans amounted to RUB 436 billion at 31 March 2019.

As at 31 March 2019 RusAg’s assets amounted to RUB 3.264 trillion, a rise of RUB 149.5 billion from YE2018 (+4.8%).

In Q1 2019 customer accounts and deposits grew RUB 216.5 billion (+8.9%) totaling RUB 2.638 trillion. Corporate customer accounts went up by RUB 184.6 billion (+13.3%) to RUB 1.571 trillion. Retail customer accounts and deposits rose RUB 31.9 billion (+3.1%) reaching RUB 1.067 billion. The Group’s current and settlement accounts rose 8.2% during the reporting period.

The share of customer funding in the Group’s total liabilities amounted to 84.7% versus 81.7% at YE2018. The loan-to-deposit ratio as at 31 March 2019 stood at 89.3%.

Net interest income amounted to RUB 16.7 billion for Q1 2019. Net fee and commission income was flat y-o-y (RUB 4.7 billion). In the reporting period, the Group’s Cost/income ratio (operating expenses divided by net operating income (before allowance for credit losses)) stood at 52.6%.

The Group recorded a net profit of RUB 553 million for Q1 2019.

As at 31 March 2019 the Group’s total equity amounted to RUB 150.2 billion.

The Group’s capital adequacy ratio (N1.0) as of 1 April 2019 (under the Bank of Russia requirements) stood at 14.7%.

Russian Agricultural Bank announces its FY2018 IFRS results

Russian Agricultural Bank (RusAg, the Group) announces its consolidated financial results for the full-year 2018 according to International Financial Reporting Standards (IFRS).

“The Bank’s key task is providing of comprehensive financial support to agribusiness, an industry which shows robust performance. Agricultural producers have reached and outperformed the self-sufficiency targets set forth by the Russian Food Security Doctrine. The year 2018 has changed the strategic vector for agribusiness: the focus shifts from import substitution to unlocking export potential. This task will require significant investments both in building up the sector output and developing related processing and logistics facilities. This will also require an increase in competitive advantages and efficiency of the Russian agribusiness”, Kirill Levin, First Deputy Chairman of the Board of RusAg, said.

In 2018, the Group showed a sustainable upward trend in corporate lending while retaining high market shares in lending to agribusiness with a specific focus on enhanced asset quality. In the reporting period, the Group’s gross loan portfolio went up 16.3% (+RUB 321.3 billion) reaching RUB 2.290 trillion. Corporate loans (including loans to customers measured at fair value through profit or loss) rose by 15.6% (+RUB 250.5 billion) from YE2017 and totaled RUB 1.856 trillion. Retail loans grew by 19.5% (+RUB 70.8 billion) to RUB 434.2 billion.

The Group recorded a net profit of RUB 1.5 billion for 2018 as compared to a loss of RUB 19.5 billion for 2017. The positive bottom-line result was driven by consistent improvements in loan book quality and operating income growth.

In 2018, the Group alongside financial support of agribusiness put priority on expanding its transaction business. Net interest income rose 6.5% up to RUB 67.4 billion from RUB 63.3 billion year-on-year. Net fee and commission income grew 6.6% up to RUB 21.5 billion from RUB 20.2 billion 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 47.0% as compared to 48.2% year-on-year.

As at 31 December 2018, RusAg’s assets amounted to RUB 3.115 trillion, a rise of RUB 225.8 billion from YE2017 (+7.8%).

The Group developed its funding base in 2018, in the first place, by raising customer accounts, diversifying sources and reducing the cost of funding, in particular through prioritizing the growth of current accounts. Large new customer acquisition was underpinned by upgrades introduced in the Bank’s IT platform, expanding of transaction business, Internet and Mobile banking product offering.

In 2018, customer accounts and deposits grew RUB 217.5 billion (+9.9%) totaling RUB 2.421 trillion. Corporate customer accounts went up by RUB 40.3 billion (+3.0%) to RUB 1.386 trillion. Retail customer accounts and deposits rose RUB 177.2 billion (+20.7%) reaching RUB 1,035 billion. The Group’s current and settlement accounts rose 16.8% during 2018.

Customer accounts growth alongside the scheduled repayment of large international borrowings in 2018 supported the building of the Group’s balanced liabilities structure and liquidity. The share of customer funding in the Group’s total liabilities amounted to 81.7%. The share of funding raised in the international capital markets in total liabilities dropped to 0.9% from 5.3%. The loan-to-deposit ratio as at 31 December 2018 stood at 94.6%.

In 2018, the Bank took further steps for capital replenishment. The Bank successfully placed perpetual subordinated bonds in the local market in the equivalent of RUB 23.3 billion. Also RusAg received RUB 25 billion in share capital injections. As at 31 December 2018, the Group’s total equity amounted to RUB 151.7 billion, adding RUB 44.5 billion during the year (adjusted for IFRS 9 adoption effect).

 

Russian Agricultural Bank (RusAg, the Group) announces its interim condensed consolidated financial results for 9M 2018 according to International Financial Reporting Standards (IFRS).

In 9M 2018 the Group ensured positive loan book dynamics with special focus on high quality of new loans issued both to prioritized industries (including agribusiness) and other sectors being of strategic interest for the Group. The Group kept building a stable funding base in the amounts matching its business needs through upgrading its corporate and retail product and services offering. Active client focus underpinned an increase in the Group’s operating income.

In the reporting period, the Group’s gross loan portfolio went up 15.2% (+RUB 299.2 billion) reaching RUB 2.268 trillion. Corporate loans (including loans to customers measured at fair value through profit or loss) rose by 14.5% (+RUB 232.7 billion) from YE2017 and totaled RUB 1.838 trillion. Retail loans grew by 18.3% (+RUB 66.5 billion) to RUB 429.9 billion.

As at 30 September 2018 RusAg’s assets amounted to over RUB 2.825 trillion, a rise of RUB 19 billion from YE2017 (adjusted for IFRS 9 adoption effect).

Customer accounts and deposits grew RUB 49.5 billion (+2.1%) totaling RUB 2.250 trillion. Corporate customer accounts dropped by RUB 65.7 billion (-4.9%) to RUB 1.280 trillion due to the scheduled repayment of a few large short-term deposits in Q3 2018. Whereas retail customer accounts and deposits rose RUB 112.2 billion (+13.1%) reaching RUB 969.8 billion.

The share of customer funding in the Group’s total liabilities went up to 82.9% from 81.7%. The Group’s loan-to-deposit (LTD) ratio stood at 100.8% as at 30 September 2018.

The share of funding raised in the international capital markets in total liabilities dropped from 5.3% to 1.0%. The share of borrowings from the Bank of Russia in the Group’s liabilities decreased 7.8% to RUB 19.8 billion.

In 9M 2018 the Group’s net interest income rose 14.1% up to RUB 55.0 billion from RUB 48.2 billion year-on-year.

Net fee and commission income grew 8.1% up to RUB 16.0 billion from RUB 14.8 billion 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 49.2% as compared to 48.2% year-on-year.

The Group’s net loss for the period stood at RUB 9.6 billion down from RUB 12.3 billion for year-on-year. The loss was incurred due to recording additional credit loss expenses resulting from problem assets workouts.

At 30 September 2018 the Group’s equity totaled RUB 109.7 billion up by RUB 2.5 billion (+2.3%) from YE2017 (adjusted for IFRS 9 adoption effect).

The Group’s capital adequacy ratio (N1.0) as of 1 October 2018 (under the Bank of Russia requirements) stood at 14.1%.

RusAg, being the core financial partner for agribusiness, has delivered on its obligations to support the sector while working towards fulfilling the Government tasks to accelerate import substitution and enhance the country’s export potential. Moreover, the Bank grew financing to other prioritized sectors and further increased its operating efficiency and loan book quality.

Russian Agricultural Bank announces its 1H 2018 IFRS results

Russian Agricultural Bank (RusAg, the Group) announces its interim condensed consolidated financial results for 6M 2018 according to International Financial Reporting Standards (IFRS).

In H1 2018 the Group ensured positive dynamics of its key performance indicators as compared to YE2017 and Q1 2018 based on the new requirements of IFRS 9. The growth on the lending side was supported by active building of a stable funding base through attracting corporate and retail customer accounts. As at 30 June 2018, the Group increased its equity, while its efficiency indicators continued to show a positive trend.

In the reporting period, the Group’s gross loan portfolio went up 12.7% (+RUB 250.8 billion) reaching RUB 2.220 trillion. Corporate loans (including loans to customers measured at fair value through profit or loss) rose by 12.6% (+RUB 202.8 billion) from YE2017 and totaled RUB 1.808 trillion. Retail loans grew by 13.2% (+RUB 48 billion) to RUB 411.5 billion.

As at 30 June 2018 RusAg’s assets increased to over RUB 2.941 trillion which is a 1.8% growth (+RUB 52.2 billion) from YE2017. In nominal terms (adjusted for IFRS 9 adoption effect) assets grew RUB 135.4 billion (+4.8%). While in Q2 2018, assets grew by 3.9% (+RUB 111.3 billion).

As at 30 June 2018 customer accounts and deposits grew RUB 169.3 billion (+7.7%) totaling RUB 2.373 trillion. Corporate customer accounts expanded by RUB 104.5 billion (+7.8%) to RUB 1.450 trillion. In Q2 2018 corporate customer accounts increased by RUB 128.8 billion (+9.7%). Such result more than offset a scheduled repayment of a few large deposits in Q1 2018.

In H1 2018 retail customer accounts and deposits rose RUB 64.8 billion (+7.6%) reaching RUB 922.4 billion. The share of customer funding in the Group’s total liabilities went up to 84.1% from 81.7%. The Group’s loan-to-deposit (LTD) ratio stood at 93.5% as at 30 June 2018.

The share of funding raised in the international capital markets in total liabilities dropped from 5.3% to 3.1%. The share of borrowings from the Bank of Russia in the Group’s liabilities decreased 5.5% to RUB 20.3 billion.

In the reporting period, the Group further improved its operating profitability. Net interest income rose 25.2% up to RUB 36.9 billion from RUB 29.5 billion year-on-year. Respectively, net interest margin widened from 2.5% to 2.7%.

Net fee and commission income grew 5.4% up to RUB 9.9 billion from RUB 9.4 billion year-on-year.

In the reporting period, the Group continued to improve its cost efficiency. The Group’s Cost/income ratio (operating expenses divided by net operating income (before allowance for credit losses) stood at 47.9% as compared to 48.2% year-on-year.

In H1 2018 the Group earned a net profit of RUB 215 million as compared to a loss of RUB 10.8 billion in H1 2017.

In Q2 2018 the Group’s equity, after a negative adjustment in Q1 2018 due to IFRS 9 adoption, went up to RUB 118.5 billion from RUB 107.7 billion in the previous quarter. The Group’s equity replenishment was underpinned by a successful placement of a RUB 15 billion local perpetual subordinated bond issues in April 2018.

The Group’s capital adequacy ratio (N1.0) as of 1 July 2018 (under the Bank of Russia requirements) stood at 14.4%.

Sustainable growth of the key performance indicators helped the Group ensure stable financial support of Russian agribusiness and other prioritized economic sectors. RusAg, being the major financial partner for agribusiness, contributes to accomplishing the Government tasks related to the core sector development, strengthening the country’s food security and building up its export potential.

 

Russian Agricultural Bank announces its 3M 2018 IFRS results

Russian Agricultural Bank (RusAg, the Group) announces its interim condensed consolidated financial results for 3M 2018 according to International Financial Reporting Standards (IFRS). The report is prepared based on the new requirements of IFRS 9 “Financial Instruments” that introduced changes to how the Group’s financial assets are classified and measured.

In Q1 2018, the Group continued its work targeted at building a high quality corporate and retail loan book, raising funding in the amounts matching its business needs relying on the growing client pool and the local financial market. The Group ensured the loan book expansion and improved financial performance, posting a bottom-line profit.

In the reporting period, the Group’s gross loan portfolio went up RUB 167.5 billion (+8.5%) reaching RUB 2.136 trillion. Corporate loans (including loans to customers measured at fair value through profit or loss) rose by RUB 142.5 billion (+8.9%) from YE2017 and totaled RUB 1.748 trillion. Retail loans grew by RUB 25 billion (+6.9%) to RUB 388.4 billion.

In Q1 2018, RusAg’s assets shrank RUB 59.1 billion (-2%) to RUB 2.830 trillion. This was caused by a one-off impact of adopting IFRS 9. While in real terms, assets grew RUB 24 billion (+0.9%). 

During the reporting period, deposits and customer accounts grew RUB 7.9 billion (+0.4%) and totaled RUB 2.212 trillion. Corporate customer accounts dropped RUB 24.2 billion (-1.8%) to 1.322 trillion (in view of the scheduled repayment of a few large deposits) after strong upward dynamics demonstrated by customer accounts over the previous few years.

In Q1 2018, retail customer accounts rose RUB 32.2 billion (+3.8%) reaching RUB 889.8 billion.

The share of customer funding in the Group’s total liabilities went up to 81.2% as at 31 March 2018. The Group’s loan-to-deposit (LTD) ratio stood at 96.6% as at 31 March 2018.

In Q1 2018, the share of funding raised in the international capital markets in total liabilities went down from 5.3% to 4.8%. The share of borrowings from the Bank of Russia in the Group’s liabilities decreased 2.3% to RUB 21 billion.

In the reporting period, the Group kept improving its operating profitability. Net interest income rose 17.6% up to RUB 17.4 billion from RUB 14.8 billion year-on-year.

Net fee and commission income grew 5.9% up to RUB 4.7 billion from RUB 4.4 billion 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 48% as compared to 54% for Q1 2017.

Due to transition to IFRS 9, stipulating a more conservative approach to loan loss provisioning, Q12018 IFRS financial statements reflect a one-off negative accounting effect on the Group’s equity in the amount of RUB 83.2 billion.

The growth of net interest and fee and commission income secured the Group’s positive bottom-line result. Net profit reached RUB 876 million as compared to a loss of RUB 3.9 billion in Q1 2017.

The Group’s capital adequacy ratio (N1.0) as of 1 April 2018 (under the Bank of Russia requirements) stood at 14.4%.

Sustainable growth of the key performance indicators helped the Group successfully deliver on the tasks of efficient financial support of Russian agribusiness and other prioritized economic sectors. RusAg, being the major financial partner for agribusiness, will further work towards solution of the Government tasks on the sector development.

Russian Agricultural Bank announces its FY2017 IFRS results

Russian Agricultural Bank (RusAg, the Group) announces its consolidated financial results for the full year 2017 according to International Financial Reporting Standards (IFRS).

In 2017, the Group posted strong results across all business lines showing robust growth of its key performance indicators both in corporate and retail lending, while continuing to enhance asset quality, and in terms of building a stable and diversified funding base. Moreover, the Group has successfully fulfilled the tasks of capital replenishment and further improvement of operational efficiency and bottom-line result.

Amid Russian economic recovery and rising demand for competitive banking services on the part of enterprises operating in agribusiness, other prioritized sectors and retail customers, the Group reached its loan book growth target, outperforming the Russian banking sector-wide growth (3.5%).

The Group’s gross loan book rose by 8.9% as compared to YE2016 and reached RUB 1.969 trillion. Corporate loans went up by 8.4% totaling more than RUB 1.605 trillion. In 2017, retail loans saw growth across all product segments and expanded by 11.1% up to RUB 363.4 billion. The growth was mainly driven by mortgage, consumer loans and credit cards.

As at 31 December 2017, the Group’s assets went up 17.3% and reached RUB 2.889 trillion.

Pursuing the tasks of raising customer funding, growing the share of long term deposits and retail customer accounts balances, the Group continued to upgrade its product offering and transaction services. New customer acquisition was underpinned by active development of Internet and Mobile banking services, larger number of transactions executed via remote service channels.

In 2017, deposits and customer accounts grew by 39.7% and totaled RUB 2.204 trillion as compared to YE2016. Corporate customer accounts expanded by 39.5% and totaled RUB 1.346 trillion. Retail customer accounts rose by 39.9% reaching RUB 857.6 billion. 

The share of customer accounts in total liabilities went up from 68.7% at YE2016 to 81.7% at YE2017. The Group saw another record in terms of long term liquidity with its loan-to-deposit (LTD) ratio dropping to 89.3% as at 31 December 2017 as compared to 114.6% at YE2016.

On the back of lower costs and longer maturities of its funding base the Group decreased its borrowings from the Bank of Russia by 25.8% to RUB 21.5 billion from RUB 28.9 billion at YE2016. RusAg continued to reduce its reliance on the funds raised in international financial markets. In 2017, the Group repaid Eurobonds and a subordinated loan in the equivalent of RUB 172 billion. The share of funding attracted in international capital markets in the Group’s total liabilities decreased to 5.3% from 14.7%.

In 2017, the Group maintained strong operational efficiency and delivered a sizeable core income growth. Net interest income rose 12% up to RUB 63.3 billion from RUB 56.5 billion year-on-year. The rise in net interest income supported RusAg’s net interest margin which widened from 2.4% to 2.6% in 2017. Net fee and commission income grew 39.8% up to RUB 20.2 billion from RUB 14.4 billion year-on-year.

In the reporting period, the Group continued to enhance its cost efficiency cutting its Cost/income ratio (operating expenses divided by pre-impairment net operating income) to 48.1% from 61.4% for 2016.

The Group made further progress towards enhancing its loan book quality. In 2017, the Group decreased charges for loan impairment provisions to RUB 63.9 billion from RUB 86.5 billion a year earlier. The Group’s bottom-line result for the period remained negative at RUB 19.5 billion, however, substantially improving versus a loss of RUB 58.9 billion in 2016.

In 2017, RusAg completed the capital replenishment procedures needed for ensuring financial support of agribusiness and expanding lending to other sectors prioritized in the Bank’s strategy. RusAg received RUB 50 billion in share capital injections. In 2017, the Group’s total equity grew 15.7% adding up to RUB 190.4 billion. As at 1 January 2018, the Group’s capital adequacy ratio under the Bank of Russia requirements (N1.0) stood at 15.5%, N1.1 – 10.5%, N1.2 – 11.0%.

Overall, in 2017, the Group grew its loan book at the rate above the market average, reinforced its capital cushion and significantly improved its long term liquidity, which will underpin successful work targeted at efficient financing of agribusiness and other priority sectors.

Russian Agricultural Bank announces its 9M 2017 IFRS results

Russian Agricultural Bank (RusAg, the Group) announces its interim condensed consolidated financial results for 9M 2017 according to International Financial Reporting Standards (IFRS).

The Group’s sustainable business growth contributed to posting strong results both in terms of quality and quantity in lending, funding base development and higher operational efficiency.

In the reporting period, the growth rates of the Group’s lending outpaced the Russian banking sector-wide growth. The Group ensured an increase in financing of the priority sectors of Russian economy, including agribusiness. At the same time, RusAg expanded lending to non-financial organizations in other industries, being of strategic interest for the Group, and retail customers.

In 9M 2017, the Group’s gross loan portfolio rose by RUB 168 billion (+9.3%) and reached RUB 1.976 trillion as compared to YE2016. Corporate loan portfolio rose by RUB 148.3 billion (+10.0%) up to RUB 1.629 trillion. Retail loan portfolio grew by RUB 19.7 billion (+6.0%) up to RUB 346.8 billion.

In 9M 2017, the Group’s assets went up RUB 193.5 billion (+7.9%) and reached RUB 2.656 trillion.

In January - September 2017, the Group made further progress in developing its funding base by attracting and diversifying sources of customer accounts, reducing reliance on wholesale borrowings and bringing down the cost of funding.

For the 9 months of 2017, RusAg’s customer accounts grew RUB 324 billion (+20.5%) and totaled RUB 1.902 trillion as compared to RUB 1.578 trillion at YE 2016. On the back of high growth rates the share of customer accounts in total liabilities went up from 69% at YE2016 to 77% as at 30 September 2017. In 9M 2017, corporate deposits and current accounts grew by RUB 149.6 billion (+15.5%) and totaled RUB 1.114 trillion. Retail customer accounts rose RUB 174.4 billion (+28.4%) and reached RUB 787.4 billion.

The Group decreased its borrowings from the Bank of Russia, which was underpinned by lower costs and longer maturities of the funding base. In 9M 2017, the borrowings from the Bank of Russia went down 23% (from RUB 28.9 billion at YE2016 to RUB 22.3 billion at 30 September 2017).

The Group continued to replace the funds earlier raised in international capital markets with corporate and retail customer accounts. In particular, in 9M 2017, the funds raised through Eurobonds issued in international capital markets, including external subordinated debts, went down 36% to RUB 216.7 billion. The share of this funding source in the Group’s total liabilities decreased from 14.7% to 8.7%.

The Group’s sizeable and robust funding base contributed to further improvement of the respective structural ratio. The loan-to-deposit (LTD) ratio stood at 103.9% as at 30 September 2017 as compared to 114.6% at YE 2016.

In January – September 2017, RusAg grew its net operating income, including by effectively managing its operating and administrative expenses. In 9M 2017, net interest income rose 12.8% from RUB 42.8 billion up to RUB 48.2 billion year-on-year. Net interest margin widened from 2.5% to 2.7% in 9M 2017. Net fee and commission income grew 45.4% in 9M 2017 up to RUB 14.8 billion as compared to RUB 10.2 billion year-on-year. The Group raised its cost effectiveness which resulted in a substantial improvement of Cost/income ratio (operating expenses divided by pre-impairment net operating income). The Cost/income ratio declined from 57.6% in 9M 2016 to 48.5% in 9M 2017. The Group’s loss for the reporting period decreased three times to RUB 12.3 billion as compared to RUB 35.1 billion in 9M 2016.

In January – September 2017, RusAg maintained a comfortable capital buffer, including through the support on the part of the Government that provided RUB 30 billion for capital replenishment. In 9M 2017, the Group’s total equity grew 8.3% and reached RUB 178.2 billion as compared to RUB 164.6 billion at YE 2016. As of 1 October 2017, the Group’s capital adequacy ratio (N1.0) stood at 14.9%.

Overall, in 9M 2017, RusAg showed sustainable growth in all key business lines and made strong progress on operational efficiency. Moreover, the Group has fully accomplished the targets relating to the growth of lending to agribusiness and other prioritized economic segments. The Group will continue to expand financing of agribusiness thereby contributing to higher sector output and enhanced competitiveness of the national agricultural producers.

Russian Agricultural Bank announces its 1H 2017 IFRS results

Russian Agricultural Bank (RusAg, the Group) announces its interim condensed consolidated financial results for 6M of 2017 according to International Financial Reporting Standards (IFRS).

In the reporting period, the Group achieved growth of its key performance indicators both in lending and building a robust funding base as well as in operational efficiency which had a positive impact on the financial result of the Group.

By the end of the reporting period, the Group’s gross loan portfolio reached RUB 1.960 trillion rising by 8.4% as compared to YE2016. The growth rates of the Group’s lending significantly outpaced the banking sector-wide growth. This result was driven by a simultaneous growth of both corporate and retail lending. Corporate loan portfolio rose by RUB 142.6 billion (+9.6%) up to RUB 1.623 trillion. Retail loan portfolio grew by RUB 9.3 billion (+2.9%) up to RUB 336.5 billion which completely offset the scheduled seasonal decline of retail loan book in Q1 2017.

The Group’s assets went up 5.5% and reached RUB 2.6 trillion in 1H 2017.

For the first six months 2017, customer accounts, which form the backbone of the Group’s funding base, rose 17.2% and totaled RUB 1.849 trillion as compared to RUB 1.578 trillion at YE 2016. Corporate deposits and current accounts showed a 15.6% increase up to RUB 1.115 trillion mainly due to an inflow of funds of non-state entities whose accounts went up to RUB 745.8 billion (+30.4%). The Group also achieved a significant growth of retail deposits and current accounts which rose 19.7% and reached RUB 733.9 billion. Such results contributed to a further positive structural shift in the Group’s liabilities composition with the share of customer accounts in the total pool of attracted resources rising from 69% to 76% as at 30 June 2017.

The improvement of the Group’s funding mix was also driven by a gradual redemption of international capital markets borrowings and continuing decrease of funds attracted from the Bank of Russia. In particular, in 1H 2017, the Group repaid Eurobonds and a subordinated debt for an equivalent of RUB 99.2 billion. In the reporting period, funding raised in the international capital markets, including external subordinated debts, went down 33.7% and amounted to RUB 224.2 billion. The share of this funding source in the Group’s total liabilities decreased from 14.7% to 9.2%. The borrowings from the Bank of Russia went down 20.9% from RUB 28.9 billion at YE2016 to RUB 22.9 billion at 30 June 2017.

The Group’s loan-to-deposit ratio, which is a measure of the Group’s high long term liquidity, also improved and stood at 106.0% as at July 1, 2017 as compared to 114.6% at year-end.

Based on the results of 1H 2017, the Group delivered strong operational efficiency. In 6M 2017, net interest income rose 10.4% up to RUB 29.5 billion as compared to RUB 26.7 billion year-on-year. Such dynamics contributed to the expansion of net interest margin in the reporting period to 2.5% from 2.3% in 1H 2016. At the same time, net fee and commission income grew 41.8% up to RUB 9.4 billion as compared to RUB 6.6 billion year-on-year. In 1H 2017, the Group significantly raised its cost effectiveness with Cost/income ratio (operating expenses divided by pre-impairment net operating income) declining to 48.7% from 58.3% in 6 months of 2016.

The growth of net interest and fee and commission income alongside declining loan impairment charges and administrative expenses made it possible for the Group to decrease its loss for 1H 2017 more than twice to RUB 10.8 billion as compared to RUB 25.3 billion in 1H 2016.

In the reporting period, the Group maintained a comfortable capital adequacy, which facilitated the expansion of lending to agricultural commodity producers and agribusiness enterprises. As of July 1, 2017, the Group’s capital adequacy ratio (N1.0) stood at 14.6%.

Overall, in 1H 2017, the Group fully accomplished the targets relating to the growth of lending to Russian agribusiness and other prioritized economic segments. Russian Agricultural Bank will continue its work aimed at enhancing the competitiveness of national agricultural producers, agricultural production and Russian exports capacity. At the same time, the Group will move towards improving its loan portfolio quality and higher operational efficiency.

Russian Agricultural Bank announces its 3M 2017 IFRS results

Russian Agricultural Bank (RusAg, the Group) announces its interim condensed consolidated financial results for 3M 2017 according to International Financial Reporting Standards (IFRS).

In Q1 2017, amid gradual recovery of the Russian economic growth the Group continued to build a high quality loan book and stable funding base.

In the reporting period, the Group’s gross loan portfolio went up RUB 58.0 billion (+3.2%) reaching RUB 1.866 trillion. This result was driven by corporate loan growth which rose by RUB 62.2 billion (+4.2%) and totaled RUB 1.543 trillion. Retail loans declined by RUB 4.2 billion (-1.3%) to RUB 322.9 billion due to the scheduled seasonal repayment of outstanding debts at the start of the year. In line with the general market trend, in the subsequent months such loans are replaced with new ones.

In Q1 2017, RusAg’s assets shrank RUB 30.8 billion (-1.2%) to RUB 2.432 trillion. This marginal decrease in assets was caused by a reduction in interbank funds placed as part of arbitrage transactions.

During the reporting period, the Group specifically focused on building a stable funding base, in the first place, by servicing its target client groups. Corporate customer accounts, excluding state entities, grew RUB 82.3 billion (+14.4%) and totaled 654.1 billion. Deposits of state organizations dropped RUB 145.7 billion (-37.1%) to 247.3 billion in view of the scheduled repayment of large short term deposits, which are gradually replaced with stable client accounts. In Q1 2017, retail customer accounts rose RUB 48.4 billion (+7.9%) reaching RUB 661.4 billion.

The share of customer funding in the Group’s total liabilities reached 69%.
In Q1 2017, the share of funding raised in the international capital markets in total liabilities went down from 14.7% to 13.2%. The share of borrowings from the Bank of Russia in the Group’s liabilities decreased 18.2% to RUB 23.7 billion.

In Q1 2017, the Group’s capital adequacy ratio (N1.0) remained at comfortable levels and as at 1 April 2017 stood at 15.7%. Moreover, in late March the Bank received a RUB 5 billion share capital replenishment as part of the 2013–2020 State Program on Agribusiness Development and Regulation of Agricultural Products, Commodities and Food Markets.

In the reporting period, the Group expanded its lending operations while the system-wide loan book declined. This trend underpinned RusAg’s interest income growth. Net interest income went up to RUB 14.8 billion (+11.1%) as compared to RUB 13.3 billion in Q1 2016.

The Bank actively managed its customer relationships and developed its service offering thereby securing a year-on-year growth of net fee and commission income by RUB 1.2 billion (+36.5%) up to RUB 4.4. billion.

The growth of net interest and fee and commission income and a decline in loan impairment charges and administrative expenses as part of the ongoing implementation of the cost optimization program helped to bring the net loss for Q1 2017 down to RUB 3.9 billion (Q1 2016: RUB 4.0 billion).

In Q1 2017, the Bank fulfilled its commitments under of the Agreement with the State Corporation ‘Deposit Insurance Agency’ (the DIA) to increase financing agribusiness and other prioritized economic sectors and a sustainable growth of loan book and loan disbursement to agribusiness as stipulated by the Agreements with the Federal Agency for State Property Management and the Russian Agricultural Ministry.

In general terms, in Q1 2017, Russian Agricultural Bank successfully accomplished the targets related to the growth of lending to agribusiness and other prioritized economic segments. At the same time, the Bank continued to boost its operational income, diversify its own funding sources, increasing the share of customer accounts in total liabilities and, on the whole, to work towards higher operational efficiency.

Russian Agricultural Bank announces its FY2016 IFRS results

Russian Agricultural Bank (the Group, RusAg) announces its consolidated financial results for the full-year 2016 under International Financial Reporting Standards (IFRS).

In the reporting period, the Group worked towards moderately growing its loan book while maintaining high quality of new loans issued both to agribusiness and other industries prioritized by the Russian Government, and in sectors being of strategic interest for the Group.

The successful accomplishment of the above targets amid macroeconomic stabilization was underpinned by the acquisition of a large number of corporate and retail clients, and the subsequent expansion of the Group’s funding sources.  

While the system-wide lending shrank by YE2016 the Group’s gross loan portfolio rose 0.2% as compared to YE2015 totaling RUB 1.808 trillion.

Corporate loans showed a slight decline of 1.8% as compared to YE2015, due to the fast-paced settlement and write-off of non-performing loans. At the same time, in the reporting period, the Bank fulfilled its commitments under of the Agreement with the State Corporation ‘Deposit Insurance Agency’ (the DIA) to finance agribusiness and other prioritized economic sectors. 

In 2016, the Group’s retail loans increased 10.2% up to RUB 327.1 billion, significantly outperforming the market average. This was mainly driven by further development of mortgage and consumer lending.

As at 31 December 2016, RusAg’s assets rose 5% and added up to RUB 2.463 trillion.

During 2016, RusAg specifically focused on upgrading its IT platform, streamlining internal business processes, and developing modern client services. These measures contributed to building a high quality, sustainable and diversified funding mix. In 2016, RusAg’s deposit and customer accounts grew 32.6% reaching RUB 1.578 trillion, with corporate customer accounts rising 37.2% up to RUB 964.7 billion and retail customer accounts – 26% up to RUB 613 billion. The share of customer funding in total liabilities reached 69% versus 55% at YE2015.

A record growth in deposits and customer accounts resulted in significant improvement of the Group’s long-term liquidity ratios. Loan-to-deposit ratio dropped to 114.6% by YE2016 from 151.7% at YE2015.

On the back of lower costs and longer maturities of its funding sources the Group substantially reduced its borrowings from the Bank of Russia by 30.7% down to 28.9 billion from 41.7 billion at YE2015.

Moreover, the Bank further reduced its reliance on international capital markets borrowings. In 2016, the Group repaid Eurobonds, including subordinated Eurobonds, in the equivalent of RUB 95.8 billion, with RUB 51.3 billion repaid before maturity. The share of funding raised in the international capital markets in total liabilities declined from 24.4% to 14.7% at YE2016.

In 2016, the Bank delivered a highly efficient operating performance. The Group substantially boosted its core income generation while keeping administrative expenses under control. Interest and fee and commission income rose 22.4% year-on-year. The Group increased its net interest income 2.4x times up to RUB 56.5 billion as compared to RUB 23.9 billion in 2015. Driven by growing net interest income RusAg’s net interest margin widened from 1.2% to 2.4% in 2016. Net fee and commission income increased 19.1% up to RUB 14.4 billion in 2016 versus RUB 12.1 billion in 2015.

The Bank made strong progress in terms of cost efficiency with Cost/income ratio (operating expenses divided by pre-impairment net operating income) decreasing to 61.2% in 2016 from 117.1% in 2015.

As a result of consistent steps to enhance the loan book quality, the share of past due instalments in the Group’s gross loan book went down to 12.6% at YE2016 from 13.7% at YE2015. In the reporting period, RusAg decreased charges for loan impairment provisions to RUB 86.5 billion from 92.8 billion a year earlier. The Group’s bottom-line result for the period remained negative at RUB 58.9 billion, however, improving versus a loss of RUB 94.2 billion in 2015.

In the reporting period, RusAg maintained strong capital adequacy ratios. Alongside the pre-scheduled capital replenishment worth RUB 8.0 billion by the Government the Group introduced and for the first time ever offered to the domestic market local perpetual subordinated bonds totaling RUB 15.0 billion. Capital adequacy ratio (N1.0) as at 1 January 2017 stood at 16.3%, N1.1 – 9.6%, N1.2 – 10.2%.  

Overall, the Group reinforced both its capital and liquidity cushions, which created additional opportunities for expanding lending to Russia agribusiness and other prioritized sectors. RusAg will continue to grow financial support of agricultural producers, including in the framework of the new subsidized lending procedure, thereby promoting better efficiency and production capacity in agribusiness, and enhancing the country’s export potential.

Russian Agricultural Bank announces its 9M 2016 IFRS results

Russian Agricultural Bank (the Group, RusAg) announces its interim condensed consolidated financial results for 9M 2016 under International Financial Reporting Standards (IFRS).

In the reporting period, the Group worked towards building a high quality loan portfolio, in particular by issuing new loans to agribusiness and other priority sectors, expanding its funding base, and maintaining strong capital adequacy ratios.

As at 30 September 2016, RusAg’s gross loans amounted to RUB 1.826 trillion expanding by 1.1% from YE 2015. Retail loans grew by 8.1% up to RUB 320.8 billion. This was mainly driven by an increase in mortgage and consumer lending. A sustainable growth of retail loans was underpinned by higher consumer demand supported by gradual stabilization of macroeconomic conditions in overall terms and also by the state subsidized mortgage lending program.

RusAg’s corporate loan portfolio stayed almost flat as compared to YE 2015 (RUB 1.5 trillion). Additionally, in the reporting period the Bank increased lending to the prioritized economic sectors in line with the commitments under of the Agreement with the State Corporation ‘Deposit Insurance Agency’ (the DIA).

In 9M 2016, RusAg’s assets rose 5.2% as compared to YE 2015 and exceeded RUB 2.470 trillion.

In 9M 2016, the Group’s customer accounts being the core funding source grew 27.8% and amounted to RUB 1.521 trillion. Corporate customer accounts increased 35.2% up to RUB 950.6 billion, retail accounts – 17.2% up to RUB 570.1 billion. RusAg worked towards building a stable and diversified funding base by developing modern client services with a focus on the high quality of its product offering. These steps contributed to a further increase in the share of customer accounts in total liabilities, which went up from 55% at YE 2015 to 66% as at 30 September 2016.

The growing deposits and customer accounts secured a gradual substitution of borrowings earlier raised in the international capital markets. At the same time, the Group worked to reduce its reliance on international wholesale funding and attract cheaper funding sources. To achieve this, in early July 2016 the Group exercised the call option to redeem its subordinated USD 800 million Eurobond before maturity. Overall, in 2016, the Group repaid an equivalent of RUB 96 billion due under its international debt issues. In 9M 2016, the share of international debts in total liabilities went down to 16.8% from 24.4%.

In 9M 2016, the Bank decreased its borrowings from the Bank of Russia by 43% - from RUB 41.7 billion at YE 2015 down to RUB 23.8 billion.

In 9M 2016, RusAg grew its income at a high rate while efficiently managing costs. Interest and fee and commission income rose 26.6% year-on-year. In 9M 2016, the Group increased its net interest income threefold up to RUB 42.8 billion as compared to RUB 14.9 billion in the same period of 2015. On the back of net interest income growth RusAg’s net interest margin rose from 1% to 2.5% in 9M 2016 year-on-year.

The expanding client base and transaction business which involved a full-scale rollout and replication of modern banking technologies across the branch network contributed to a sustainable upward dynamics of the Bank’s fee and commission income. Net fee and commission income increased 18.4% - to RUB 10.2 billion in 9M 2016 versus RUB 8.6 billion in 9M 2015.

The Group’s cost-to-income ratio (operating expenses divided by net operating income before provisions) has significantly improved from 106.6% in 9M 2015 down to 57.6% in 9M 2016.

As a result of consistent steps to maintain the loan book quality against the background of a mild stabilization of macroeconomic environment, the Group in the reporting period decreased charges for loan impairment provisions down to RUB 59.2 billion from 69.4 billion a year earlier. This resulted in an improvement of the Group’s bottom-line performance. Net loss for the period decreased by half from RUB 67.9 billion in 9M 2015 to RUB 35.1 billion in 9M 2016.

In the reporting period, RusAg maintained a strong capital adequacy. The Group accumulated a comfortable capital cushion thanks to both a direct capital replenishment worth RUB 8 billion made in April 2016 by the Government and the capital market instruments compliant with the criteria for inclusion in Tier 1 capital, which were introduced and for the first time ever offered to the domestic market by the Group. In July and October 2016, RusAg placed local perpetual subordinated bonds totaling RUB 15 billion. Capital adequacy ratio (N1.0) at 1 October 2016 stood at 16.02%.

The Group will further work towards expanding lending to priority economic sectors while retaining an undisputed leadership in servicing agribusiness. RusAg will keep a special focus on ensuring fast-paced import substitution and the country’s food independence.

Russian Agricultural Bank announces its 1H 2016 IFRS results

Russian Agricultural Bank (RusAg) announces its interim condensed consolidated financial results for 1H 2016 under International Financial Reporting Standards (IFRS).

In 1H 2016, the Bank’s interest and fee and commission income reached an all-time high totaling RUB 127.7 billion.

Backed by a gradual recovery of interest margin during 1H 2016, facilitated by the easing of the Bank of Russia’s monetary policy and optimization of the Bank’s funding costs, RusAg grew its net interest income fourfold up to RUB 26.7 billion from RUB 7 billion in 1H 2015. Net interest margin rose from 0.8% in 1H2015 to 2.3% in 1H 2016.

Transaction business development, alongside points-of-sale upgrading and customer service quality enhancement contributed to a significant growth of the Bank’s fee and commission income. The most substantial growth in fees and commissions was generated by cash and settlement services, insurance products sales, guarantee issuance and bank card transactions. RusAg’s net fee and commission income increased 28% - to RUB 6.6 billion in 1H 2016 against RUB 5.2 billion in 1H 2015.

In 1H 2016, the Bank’s assets rose 3.1% (by RUB 72 billion) as compared to YE2015 and exceeded RUB 2.42 trillion.

The Bank substantially increased new loan issuance to its target industries – agribusiness and related sectors. In January – June 2016, the Bank extended more than 267,000 loans under the State Program for Agribusiness Development and Regulation of Farm Produce, Raw Materials and Foodstuffs Markets for 2013-2020 totaling RUB 389 billion, which is twice as much as in 1H 2015. Additionally, the Bank fulfilled its commitments to increase lending to the economic sectors prioritized by the Government under of the Agreement with the State Corporation ‘Deposit Insurance Agency’ (the DIA).

In 1H 2016, the Bank continued to actively grow its corporate and retail customer accounts with a view to diversifying the Bank’s liabilities, cutting funding costs and gradually substituting the borrowings earlier raised on the international capital markets. In the reporting period, customer accounts increased 18.2% to RUB 1.407 trillion. Corporate customer accounts grew 21.9% to RUB 857 billion, retail accounts – 12.8% to RUB 549 billion. The share of customer accounts in total liabilities grew to 63% from 55% at YE2015.

In 1H 2016, the Bank decreased its borrowings from the Bank of Russia by 48.8% - from RUB 41.7 billion at YE2015 down to RUB 21.4 billion at 30 June 2016.

Further improvements in customer relationship management and cost optimization helped the Bank to secure a Cost-to-income ratio of 58.3%.

In 1H 2016, in view of positive signs in the sector and favourable conditions in agribusiness markets, RusAg engaged in clearing up its balance sheet from problem assets. Charges for loan impairment provisions, related to these procedures, amounted to RUB 40.8 billion. Combined with a gradual margin recovery to 2014 levels, this led to a loss for the period in the amount of RUB 25.3 billion. However, compared to 1H 2015 this figure went down almost twice (against RUB 45.4 billion).

While creating its loan impairment provisions in the appropriate amounts, RusAg maintains a strong capital adequacy. Capital adequacy ratio (N1.0) at 01.07.2016 stood at 16.7% versus 16.3% at YE2015.

In general terms, in 1H 2016 Russian Agricultural Bank was successful in providing financial support to Russian agribusiness taking into account the Government’s target to ensure fast-paced import substitution and also increased lending to other priority economic sectors as part of the Agreement with the DIA. At the same time, the Bank continued its efforts to increase operational efficiency and loan portfolio quality. 

Russian Agricultural Bank announces its 1Q 2016 IFRS results

Russian Agricultural Bank (RusAg) announces its interim condensed consolidated financial results for 3M 2016 according to International Financial Reporting Standards (IFRS).

During 1Q 2016, amid gradual stabilization of the economic environment and the financial market, the Bank has ensured loan growth and increase in customer accounts. RusAg’s loan portfolio increased RUB 16.6 billion (+1%) in 1Q 2016 and amounted to RUB 1.821 trillion before provisions for loan impairment. Corporate loans grew RUB 10.5 billion (+0,7%) and reached RUB 1.519 trillion, retail loans - RUB 6 billion (+2%) – to RUB 302.9 billion.

The Bank’s assets increased 4.4% (by RUB 102.7 billion) and amounted to RUB 2.451 trillion as of 1Q 2016.

In 1Q 2016, the Bank continued to increase the share of customer accounts in its liabilities structure for the purpose of substitution of the amortizing funds raised on international capital markets. The share of customer accounts in total liabilities grew to 61% against 55% as of YE 2015. In the reporting period customer accounts increased 16.2% and amounted to RUB 1.383 trillion, including corporate customer accounts - 22% to RUB 859 billion, retail deposits - 8% to RUB 524 billion.

The proportion of funds raised on the international capital market in total liabilities of the Bank decreased in 1Q 2016 from 24.4% to 20%.

RusAg’s capital adequacy ratio (N1) is maintained at the level that ensures financial strength and prospective development of the Bank. As of 01.04.2016 the ratio stood at 16.4%.

Outperforming growth rates of the Bank’s lending business as compared to the market contributed to a significant increase in interest income. Against the backdrop of the structure and cost optimization of the Bank’s funding base that has led to a four-fold increase in net interest income – to RUB 13.3 billion compared to RUB 3.6 billion in 1Q 2015. Net interest margin grew from 0.8% in 1Q 2015 to 2.7% in 1Q 2016.

Advanced customer relations management and product line enhancement has led to a significant increase in fee and commission income across the entire range of the Bank’s commercial operations, such as cash and settlement services, insurance products sales, guarantee issuance, bank cards transactions etc. Net fee and commission income of the Bank increased 51% to RUB 3.2 billion in 1Q 2016, as compared to RUB 2.1 billion in 1Q 2015.

The Banks total comprehensive income, including loss for the period (RUB 4,023 million) and positive revaluation of securities at fair value (RUB 4,417 million), amounted to RUB 394 billion against the total comprehensive loss of RUB 15.6 billion in 1Q 2015.

Following the results of Q1 2016, Russian Agricultural Bank has successfully completed the task of increasing the volume of lending to Russian agribusiness as well as the additional commitments for providing financial support to other priority sectors of the Russian economy.

Russian Agricultural Bank announces its FY2015 IFRS results

Russian Agricultural Bank (RusAg) announces its FY2015 consolidated financial results according to International Financial Reporting Standards (IFRS).

In 2015, RusAg not only increased lending to priority industries of the Russian economy but also achieved a growth rate outpacing that of the banking system while maintaining conservative approaches to risk management.

In 2015, the Bank’s gross loan portfolio increased by RUB 250.9 billion (16.1%) and amounted to RUB 1.805 trillion. Corporate loans increased by RUB 235.2 billion (18.5%) up to RUB 1.508 trillion. In 4Q2015, total loans increased by RUB 46.4 billion (4.1%), with corporate loans growing by RUB 33 billion.

During the reporting period, retail loans grew 15.7 billion (5.6%) up to RUB 296.8 billion. Following a drop in 1H2015 caused by diminished economic activity of population, retail lending growth resumed in 2H2015. During 2H2015, retail loans increased by 10%, or RUB 27.2 billion, adding RUB 13.3 billion in 4Q2015. The rise was driven both by a decline in the market interest rates and implementation of state programs for retail lending stimulation, and the Bank’s measures towards higher operational efficiency.

As at 31 December 2015, RusAg’s total assets grew by 22.6% and totaled RUB 2.348 trillion.

During the reporting period, amid market volatility the Bank maintained strong liquidity ratios. A substantial rise in customer accounts contributed to further decrease in the Bank’s reliance on international capital markets and diversification of its domestic funding sources in terms of cost and maturities. In 2015, customer accounts increased by 56.2% and totaled RUB 1.190 trillion, with 79.3 billion attracted in 4Q2015. Corporate customer accounts grew 54.6% up to RUB 703.3 billion. Retail customer accounts increased by 58.6% and amounted to RUB 486.5 billion. The enhancement of the product range and consistent measures taken towards higher POS efficiency resulted in the share of customer accounts in total liabilities expanding to 55% as compared to 44% at YE2014.

High funding costs combined with a shortage in available funding sources and the slow key rate reduction by the Bank of Russia after its spike at the end of 2014 resulted in a 2.5 times decline of net interest income to RUB 23.9 billion in 2015 year-on-year. Starting from 2Q2015 the Bank’s net interest margin gradually recovered. Moreover, new client attraction, product offering enhancement drove a rise of net fee and commission income, which grew 37.5% up to RUB 12.1 billion. In the past year, fee and commission income was primarily generated by cash and settlement services, insurance products sales and guarantee issuance.

In 2015, given the negative forecasts, conservative approach to assessing the borrowers’ debt service quality in line with the consistent application of risk management policies the Bank increased charges to loan impairment provisions, which grew RUB 90.4 billion in 2015. Alongside rising funding costs these factors resulted in a net loss of RUB 94.2 billion for 2015.

Targeting the expansion of efficient financial support of agribusiness, a priority sector of the domestic economy, while ensuring a capital cushion needed for creating loan impairment provisions in challenging macroeconomic environment, the Bank in 2015 raised capital both from the shareholder and market sources. The Bank’s share capital was increased by RUB 78.8 billion, with RUB 68.8 billion coming from the Deposit Insurance Agency (the DIA) as part of Russian banks’ capital replenishment program. Tier 2 capital has been substantially strengthened by a market placement of subordinated bonds and attracting deposits in the amount of RUB 40 billion and USD 1.15 billion respectively. Total capital adequacy ratio under Basel III requirements as at 31 December 2015 stood at 16.3% (YE2014 – 13.0%).

In 2015, against the background of economic recession and crisis developments in the banking sector RusAg successfully accomplished the task of providing financial support to Russian agribusiness, fast-paced substitution of imported foodstuffs, and ensuring the country’s food security while having strongly reinforced its capital base and liquidity.