10.12.2015
Asian-Pacific Bank published its consolidated financial report under IFRS for the first 3 quarters of 2015

"Asian-Pacific Bank" (PJSC) has published its consolidated financial statements in accordance with international financial reporting standards (IFRS) for the first three quarters of 2015.

Key results:

  • net operating income (before provisions) amounted to RUB 4,742 million
  • the Bank’s total assets increased by RUB 6,980 million compared to the year beginning and reached RUB 137,447 million
  • the Bank’s equity as of October 01, 2015 amounted to RUB 15,447 million up by 4,0% compared to  31 December 2014  
  • net loss for the 3rd quarter 2015 amounted to RUB 191 million, demonstrating a significant improvement of the financial result compared to the 1st half 2015 (net loss RUB 1,787 million),
  • current accounts and deposits from customers increased by 14.4% compared to the year beginning and amounted to RUB 96,666 million

Net interest income net of expenses for deposit insurance decreased by 33.1% to RUB 5,281 million, whilst net interest margin amounted to 6.5% compared with 11.2% for the same period in 2014. Decrease in the net interest margin was impacted by raised funding costs caused by the increase in the key rate in late 2014, and a decline in share of the loan portfolio in the asset structure.

Net fee and commission income dropped by 41.7% to RUB 1,518 million compared with the same period in 2014 mainly due to lower Agency commission income on insurance.

The Bank's operating income for the first three quarters of 2015 decreased by 18.4% to RUB 8,800 million; operating expenses grew by 4.3% to RUB 4,058 million. Personnel expenses decreased by 9.2% to RUB 2,396 million compared with the same period last year. Cost to income ratio rose to 46.1% compared to 36.1% for the first three quarters of 2014. Net operating income (before provision for impairment) amounted to RUB 4,742 million, which is 31.3% lower than the figure for the same period last year (RUB 6,898 million).
Cost of risk on the loan portfolio YTD is on a downward trend and for the third quarter of 2015 comprised 8.4%, which is significantly better than previous periods (12.1% for the 1st quarter of 2015 and 8.8% for the 2nd quarter). The amount of provision charges for impairment for the first three quarters of 2015 comprised RUB 7,202 million.

Net financial result from operations with financial instruments, foreign currency and precious metals amounted to RUB 1,220 million for the first three quarters of 2015 compared with RUB 303 million loss for the first three quarters of 2014. In addition, the Bank recorded a revaluation surplus of available-for-sale financial assets: RUB 370 million compared with a revaluation reverse of 157 million rubles for the first three quarters of 2014.

Net loss of the Bank for the third quarter of 2015 amounted to RUB 191 million, demonstrating a significant improvement of the financial result compared to the 1st half of 2015 (loss of RUB 1,787 million). Due to revaluation surplus of available-for-sale financial assets (RUB 370 million), the comprehensive loss for the three quarters of 2015 amounted to RUB 1,609 million. By results of three quarters of 2014, the Bank's profit amounted to RUB 281 million, comprehensive income – RUB 124 million.

Loan portfolio net of provisions fell by 13.3% compared with the year beginning and comprised RUB 74,230 million. Thus the retail loan portfolio decreased by 24.8% to RUB 39,678 million (46.5% of loan portfolio net of impairment provisions), and the loan portfolio to legal entities and individual entrepreneurs increased by 5.4% to RUB 34,553 million. The share of NPLs 90+ in the first three quarters of 2015 increased to 23.4%, the level of NPL coverage by provisions amounted to 89.9% (88.3% at the end of 2014).

Securities portfolio, representing 17.4% of the assets, increased by 26.7% compared to 31 December 2014  and amounted to RUB 23,950 million. The Bank adheres to conservative policy of investments in securities; the majority of the portfolio is government and municipal bonds, and corporate bonds with rating BB- and above (89.6% of the bond portfolio). The share of securities included into the Lombard list of the Bank of Russia is 81.6%.

Accounts and deposits of customers grew by 14.4% compared with the beginning of the year to RUB 96,666 million mainly due to the increase in term deposits of retail clients (by 19.6% to RUB 64,904 million). Deposits and current accounts of legal entities and individual entrepreneurs amounted to RUB 27,502 million, having increased by 6.3% compared with the year beginning (RUB 25,865 million). The growth of customer accounts together with reduction of the loan portfolio led to the improvement of the Loans to Deposits Ratio, which was 76.8% (101% at the beginning of 2015).

The Bank's capital according to the Basel Committee requirements, was RUB 15,093 million (a reduction of 1.3% compared with the beginning of the year). Basic Capital adequacy ratio under the Russian accounting standards (RAS) amounted to 8.2%, and the own funds (capital) ratio under RAS amounted to 11.7%.

Ratings

Asian-Pacific Bank’s positions in the Russian and international markets are confirmed by the leading rating agencies:

  • ‘B-‘ long-term foreign and local currency issuer default rating (IDR) and ‘B’ short-term foreign currency IDR by Fitch, negative outlook;
  • ‘ВВ(rus)’ – national long-term rating by Fitch, negative outlook;
  • ‘b-‘ viability rating and ‘5’ – support rating by Fitch;
  • ‘B-‘/’ВВ(rus)’ – rating of senior unsecured debt by Fitch
  • ‘B2’ – long-term foreign and local currency deposit ratings by Moody`s, negative outlook,
  • ‘b2’ — baseline credit assessment (BCA), Not Prime – Not Prime short-term bank deposit ratings by Moody`s,
  • ‘B1(cr)/Not Prime (cr)’ —Counterparty Risk Assessment by Moody’s;
  • ‘A+(II)’ – very high level of solvency by Expert RA. Rating sublevel – II, stable outlook.

Key financials (RUB million)

3Q 2015
2014
2013
2012
Assets
137,447
130,467
118,556
92,176
Gross loans to customers
94,007
98,719
86,236
61,388
Customer accounts
96,666
84,498
81,370
65,143
Equity
15,447
14,856
14,590
11,529
Net interest income
5,462
9,363
8,928
6,513
Net profit for the period
(1,979)
50
3,113
3,261


Key ratios
(%)

3Q 2015
3Q 2014
2013
2012
Net Interest margin (NIM)
6.5%
9.2%
11.0%
11.6%
Cost-to-income ratio (CTI)
46.1%
36.1%
40.0%
43.4%
ROAA
-2.0%
0.3%
3.0%
4.3%
ROAE
-17.4%
2.5%
23.8%
32.2%
NPL share (NPL 90+)
23.4%
14.1%
7.5%
5.8%
Cost of risk1
9.9%
9.8%
6.1%
3.4%
Capital adequacy ratio2
11.7%
13.2%
12.9%
12.8%

1 Calculated as an annualized ratio of impairment losses on loans to customers for a period to average gross loan portfolio
2 Calculated as a ratio of equity of the Bank to risk-weighted assets, ratio Н20.0

Background

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 has a sound platform for development in both corporate and retail segments whilst maintaining high profitability and client satisfaction levels.
According to Interfax-CEA ranking, Asian-Pacific Bank is rated 52nd position by net assets among Russian banks and 61st position by capital.
The Bank has a general banking license No. 1810. APB is a member of the state deposit insurance system in the Russian Federation.
The branch network of the Bank as of 1 November 2015 consisted of 227 offices in 112 localities, mainly in the Far East and Siberia, as well as in Moscow and Ekaterinburg. 291 ATMs and 225 self-service terminals operate on the territory of presence of APB. The head office is located in Blagoveshchensk, Amur region.