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Otkritie Banking Group Recorded Net Profit in the amount of RUB 1.5 billion in 2016

25 April 2017

Otkritie Banking Group Recorded Net Profit in the amount of RUB 1.5 billion in 2016

On April 24, 2017 the Supervisory Board of Bank Otkritie Financial Corporation approved its Condensed Consolidated Financial Statements in accordance with International Financial Reporting Standards (IFRS) for the year ended December 31, 2016.

Financial Highlights of the Group in 2016

“Taking into the account the overall macroeconomic environment, in 2016 we did not plan to increase the business volume, rather we were focused on undertaking such measures, which would help us to develop successfully in a long run and to increase our market share on the background of the recovering economy. We completed the merger of Khanty-Mansiysk Otkritie Bank with Bank Otkritie Financial Corporation and thus created the largest private universal bank in Russia, which is among the systematically important banks and has a stable diversified funding base. We continue working on the unification of product lines, operating procedures and IT systems, cost efficiency improvement and reengineering of business processes. We achieved good results in digital channels development, which role in the bank’s business steadily grows. In 2016, Rocketbank (which merged with the Bank in the second quarter of 2016) and Tochka project helped to increase the bank’s customer base significantly. Now, these fully remote digital services attract around 30-40% of new customers in the respective business segments of the bank. Otkritie bank closed another year with profit and with a stable base for further development”, - said Evgeny Dankevich, Chairman of the Management Board of Otkritie bank.

Net profit of the Group for 2016 amounted to RUB 1.5 billion.

In 2016, the Group’s revenue (operating income before provision for impairment) comprised RUB 84.7 billion.

The key source of the Group’s revenue in 2016 were net interest income, trading income and net fee and commission income, which accounted for 41.1%, 37.0% and 15.2% of the total operating income respectively. 

In 2016, net interest income (including gains from swap operations) totalled RUB 68.6 billion[1].

Net interest margin increased to 4.4% for 2016 (3.8% for 2015).

In 2016, the Group earned RUB 29.8 billion of trading income, with significant portion of it coming from  swap operations.

Net fee and commission income for 2016 increased by 10.3% year-on-year to RUB 12.9 billion, with settlements (RUB 7.8 billion), documentary operations (RUB 2.2 billion) and cash operations (RUB 1.1 billion) being the key drivers of net fee and commission income.

Operating expenses in 2016 increased by 2.6% year-on-year and totaled RUB 47.3 billion comparing with 2015 Pro-forma results[2]. Payroll expenses accounted for 56.0% of the Group’s total operating expenses.

The Cost-Income Ratio (operating expenses to operating income before provision for impairment) stood at 55.9% in 2016 (44.4% in 2015).

Balance Sheet Key Figures Dynamics

Otkritie Banking Group’s total assets decreased by 11.8%[3] and reached RUB 2,702.7 billion as at December 31, 2016 (a 19.6% decline including foreign currency revaluation).

Net loan portfolio excluding REPO transactions reduced by 8.3% to RUB 858.2 billion as at December 31, 2016 (a 11.7% decline including foreign currency revaluation).

The loan loss provision (LLP) ratio stood at 5.6% as at December 31, 2016 (3.4% as at December 31, 2015). Cost of risk ratio amounted to 3.3% in 2016 (4.0% for 2015)[4].

Investments in securities amounted to RUB 500.9 billion or 18.5% of the Group’s total assets as at December 31, 2016 (RUB 421.6 billion or 12.5% as at December 31, 2015). Securities portfolio is a source of liquid assets for the Group: around 82% of it is represented by securities from Lombard list of the Central Bank of the Russian Federation.

The Group’s total liabilities reached RUB 2,470.8 billion as at December 31, 2016, down by 15.0% compared to 2015 year-end (a 21.5% decline including foreign currency revaluation).

The Group’s customer accounts totaled RUB 1,187.4  billion as at December 31, 2016, a 1.4% reduction compared with December 31, 2015 (a 5.5% decline including foreign currency revaluation). The share of term deposits and current accounts as a proportion of the total amount of customer funds stood at 80.1% and 19.9%, respectively.

The funds of corporate customers made up 43.0% of customer funding as at December 31, 2016, while the share of retail and small business segments amounted to 51.3% of customer accounts and deposits.

As at December 31, 2016, the loan to deposit ratio including promissory notes issued to clients stood at 92.7% (100.9% as at December 31, 2015)4

Total capital adequacy ratio stood at 17.7% as at December 31, 2016.

See consolidated financial statements as at December 31, 2016 at

[1] Including interest income from swap operations in the amount of RUB 33.8 billion in 2016

[2] Pro-forma assumes that Bank Petrocommerce’s consolidation took place on January 1, 2015

[3] Hereinafter the growth rates excludes foreign currency revaluation factor

[4] Excluding repo transactions