1H 2012 Interim Financial Results
NOMOS today announces its Unaudited Condensed Interim Consolidated Statements in accordance with International Financial Reporting Standards (IFRS) as at 30 June 2012 and for the six months ended 30 June 2012, delivering on key indicators set for the period.
The Board of Directors of Nomos Bank (“NOMOS” or “the Bank” or with its subsidiaries, the “Group”) on 03 September 2012 approved the Condensed Interim Consolidated Financial Statements in accordance with IFRS for the six months ended 30 June, 2012. In 1H 2012 NOMOS demonstrated good profitability and strong loan portfolio growth, outperforming the market average.
PROFITABILITY: Solid financial performance amid difficult market conditions
In the first half of 2012, NOMOS delivered strong results, achieving RUB 8.3bn in net profit with an annualized return on average shareholders’ equity (ROAE) of 21.5% compared to 18.2% for 2011. The return on average assets (RoAA) was also healthy at 2.4% (2011: 2.0%).This strong performance was due to NOMOS’ portfolio expansion and an increase in net customer loans, particularly in the retail and small business segments.
Combined operating income before provisions for impairments during 1H 2012 was up 20.2% year-on-year to RUB 21.6 billion. Net interest income, net fees and commissions, and trading income are key income drivers of NOMOS’ revenue generation. They comprised respectively 69.4%, 16.7% and 8.1% of NOMOS’ revenue.
Net interest income increased 15.5% year-on-year to RUB 15 billion. The net interest margin was maintained at 5.1%, in line with the first quarter of 2012.
Net Fees and commissions income increased 38.5% to RUB 3.6 billion, year-on-year, with growth coming primarily from settlements (RUB 1.5 billion), documentary operations (RUB 1.0 billion) and cash operations (RUB 0.5 billion). NOMOS continues to develop currency transactions and payment settlements.
Net trading income reached RUB 1.7 billion in 1H 2012. NOMOS demonstrated positive performance in the forex, precious metals operations and limited negative revaluation of the fixed income portfolio, which declined by RUB -0.2 billion.
Operating expenses increased 14.6% year on year to RUB 9.6 billion in 1H 2012. The cost to income ratio (the ratio of operating expenses to operating income before provision for impairment) was 44.6%, a slight increase in line with management guidance.
Risk costs declined slightly to 0.7% in 1H 2012 (0.9% as at FY11) supported by the stable loan portfolio quality and an improvement in risk management capabilities. The loan loss provision expense was RUB 1.6 billion with no significant movement year on year.
NOMOS’ net profit attributable to shareholders was RUB 7.1 billion in 1H 2012. Earnings per share for the 1H 2012 was RUB 76.45.Earnings per Global Depositary Receipt (GDR) was USD 1.17 based on an exchange rate at 30 June 2012 of 32.82 RUB/USD.
CONTINUED OPERATIONAL EXPANSION: Customer loans increased outperforming the market average
As at 30 June 2012 NOMOS’ total assets were RUB 699.3 billion compared to RUB 662.1 billion at FY 2011. Net customer loans amounted to RUB 509.1 billion representing 73% of total assets.
During 1H 2012 net customer loans increased 13.7% above the market average (+9.2%) with growth principally generated by the retail and small business segments in line with NOMOS’ strategy. Retail loans grew 22.3% during the six month period to RUB 71.0 billion, small business loans grew 22.1% to RUB 36.5 billion and corporate loans grew 10.0% to RUB 353.0 billion.
The quality of the loan portfolio was maintained as the ratio of loan loss provisions to gross loans declined to 3.8% in 1H 2012 versus 4.4% at the end of 2011. The share of non-performing loans (NPLs: loans overdue more than 90 days) stood at 2.2% (2.0% at FY11). The NPLs coverage ratio remained stable at 170.2% reflecting NOMOS’ conservative approach to risk management.
NOMOS maintained a stable and well-diversified funding base with customer deposits representing 60.9% (RUB 374.7 billion) of total liabilities as at June 30, 2012. In April 2012 NOMOS issued USD 500 million of Subordinated Eurobonds for 7 years at 10%. The share of subordinated debt in total funding increased to 7.2% or RUB 44.2 billion. Interbank placements stood at 20% (RUB 123.2 billion), bonds and promissory notes issued were 9.6% (RUB 59.3 billion). Net loan to deposit ratio was 130.6% as at June 30, 2012.
NOMOS’ capitalization remains solid with Tier 1 capital ratio stable at 11.9% as at June 30, 2012 (2011: 12.0%). NOMOS’ total equity was RUB 84.3 billion, including RUB 14.8 billion of non-controlling interest. The total capital adequacy ratio was 15.5% as at June 30, 2012. In July 2012 the CBR approved the inclusion of Subordinated Eurobonds into the Bank’s supplementary capital thus improving the N1 ratio to 12.8% as at August 1, 2012. The consolidated financial statements for the half-year ended 30 June 2012 are available for viewing at https://ir.open.ru/en/
NOMOS is the eighth largest banking group in Russia by total assets and the second largest privately-owned Russian universal bank with total assets of RUB 699.3 billion and equity of RUB 84.3 billion as at 30 June 2012. NOMOS has an extensive branch network of 296 outlets in the economically important regions of Russia, with the majority of its business concentrated in Moscow, St Petersburg, Tyumen (including the Khanty-Mansiysk autonomous district), and the Novosibirsk and Khabarovsk regions. NOMOS provides a full range of banking services to corporate, small business and retail clients. As at 30 June 2012, NOMOS served approximately 12,400 corporate customers, 80,100 small business clients and approximately 1.5m retail customers, including private banking clients. NOMOS is listed on both the London Stock Exchange (GDRs) and the MICEX exchange in Moscow. NOMOS has long-term international credit ratings of BB from Fitch and Ba3 from Moody’s.