Key results:
- net operating income (before provision for loan impairment) amounted RUB 2,938 mln
- the Bank’s total assets decreased by RUB 1,839 mln YTD to RUB 128,628 mln
- the Bank’s equity increased by 1.0% YTD to RUB 14,965 mln as of the reporting date
- net loss for 1H 2015 amounted to RUB 1,787 mln
- current accounts and deposits from customers increased by 1.0% YTD to RUB 85,496 mln
Net interest income declined by 33.8% YoY to RUB 3,584 million, net fee and commission income decreased by 44.7% YoY to RUB 903 million. Net interest margin amounted to 6.3% compared to 11.2% as for the 1H 2014.
Operating income of the Bank as for 1H 2015 decreased by 22.3% YoY to RUB 5,551 million, operating expenses decreased by 1.1% to RUB 2,613 million mainly due to decrease in personnel expenses by 12.8% YoY. Cost-to-income ratio grew to 46.1% from 36.5% as of the1H 2014. Net operating income (before provision for loan impairment) decreased by 23.2% to RUB 2,938 million compared to RUB 3,828 million as for the end of 1H 2014.
Due to worsening of economic conditions in Russia, funding costs (9.8% compared to 7.0% in 1H 2014) and the Bank’s cost of risk (12.5% compared to 10.2% in 1H 2014) have grown, which mainly affected on the loss of the Bank.
Net loss of the Bank for 1H 2015 amounted to RUB 1,787 million compared to net profit in RUB 269 million as for 1H 2014. However it should be noted that interest income grew by 1.3% to RUB 9,132 million in the reporting period. Also, the Bank has significantly increased the result on operations with financial instruments that are tailored to the revaluation reserve of available-for-sale financial assets amounted to RUB 588 million, compared to a loss a year earlier in the amount of RUB 514 million. Growth of revenues from foreign exchange transactions amounted to 79.3% (RUB 403 million compared to RUB 224 million in 1H 2014).
Net loan portfolio (after provision for loan impairment) decreased by 4.0% to RUB 81,998 million compared to the beginning of the year. Portfolio of loans to individuals decreased by 16.0% to RUB 44,571 million (54.4% of the loan portfolio) and portfolio of loans to corporate clients and individual entrepreneurs grew by 14.0% to RUB 37,427 million. Share of NPLs (loans overdue more than 90 days) in the loan portfolio grew to 19.7%. The level of provision coverage of NPLs amounted to 90.3% (90.9% as of YE 2014).
Securities portfolio comprising 17.0% of the total assets rose by 15.8% YTD to RUB 21,886 million. Asian- Pacific Bank adheres to conservative investment policy; major part of the portfolio of securities is government and municipal bonds as well as corporate bonds with rating not lower than BBB- (81.0% of the portfolio).
Accounts and deposits of customers grew by 1.2% YTD to RUB 85,496 million mostly due to increase in amount of retail customers (10.9% YTD to RUB 65,049). Deposits and accounts of deposits of corporate customers and individual entrepreneurs amounted to RUB 20,447 million as of 1H 2015, decreased by 26.5% compared to RUB 25,865 million as of YE 2014. The growth of accounts of customers with reduction of the loan portfolio has led to improvement of Loans to Deposits Ratio, which amounted 95.9% (109.3% as for the year of 2014).
Capital of the Bank, calculated by the Basel Committee technique, was RUB 14.993 mln (a reduction of 2.0% since the beginning of the year). Base Capital adequacy ratio is 8.4% and the Own funds (capital) ratio is 11.8%.
Ratings
Asian-Pacific Bank’s positions in the Russian and international markets are confirmed by the leading rating agencies:
- long-term foreign and local currency issuer default rating (IDR) B+, short-term foreign currency IDR B by Fitch, negative outlook;
- viability rating b+ and support rating 5 by Fitch;
- long-term foreign and local currency deposit ratings B2 by Moody`s, negative outlook;
- the baseline credit assessment (BCA) is b2 and Not Prime short-term bank deposit ratings by Moody`s;
- B1(cr)/Not Prime (cr) - Counterparty Risk Assessment;
- bank credit rating A+(II) - very high level of solvency, rating sublevel – II by Expert RA, stable outlook.
Key financials (RUB million)
| 1H2015 | 2014 | 2013 | 2012 | |
| Total assets | 128,628 | 130,467 | 118,556 | 92,176 |
| Gross loans to customers | 99,747 | 98,719 | 86,236 | 61,388 |
| Customer accounts | 85,496 | 84,498 | 81,370 | 65,143 |
| Equity | 14,965 | 14,856 | 14,590 | 11,529 |
| Net interest income | 3,584 | 9,363 | 8,928 | 6,513 |
| Net profit for the period | (1,787) | 50 | 3,113 | 3,261 |
Key ratios (%)
| 1H2015 | 1H2014 | 2013 | 2012 | |
| Net Interest margin (NIM) | 6.3% | 11.2% | 11.0% | 11.6% |
| Cost-to-income ratio (CTI) | 46.1% | 36.5% | 40.0% | 4.4% |
| ROAA | -2.8% | 0.04% | 3.0% | 4.3% |
| ROAE | -24.0% | 3.6% | 23.8% | 32.2% |
| Loans overdue more than 90 days (NPL 90+) | 19.7% | 11.4% | 7.5% | 5.8% |
| Cost of risk1 | 10.4% | 9.3% | 6.1% | 3.4% |
| Capital adequacy ratio2 | 11.8% | 13.5% | 12.9% | 12.8% |
1 Calculated as an annualised ratio of impairment losses on loans to customers for a period to average gross loan portfolio
2 Calculated as a ratio of own funds (capital) to risk-weighted assets, Ratio N20.0
Background details
The Bank was established in the Russian Federation as a closed joint stock company in 1992 under the name Amurpromstroybank.
The Bank’s strategic goal is to establish a sustainable universal banking platform with a leading position in eastern regions of Russia that will be able to capitalize on the anticipated market growth whilst maintaining high profitability and client satisfaction levels.
According to Interfax-CEA ranking Asian-Pacific Bank is rated 57th by net assets as of July 1, 2015 and 62th by capital among Russian banks.
The Bank has a general banking license No. 1810. APB is a member of the state deposit insurance system in the Russian Federation.
The Bank has 235 offices, 357 ATMs and 218 payment terminals (July 1, 2015) from which it conducts business in 112 localities of the Russian Federation, mainly in the Far East and Siberia. The head office of the Bank is located in Blagoveshchensk, Amur Region.