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 billion1.
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 results2. 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 http://ir.open.ru/.
Information on Otkritie bank (www.open.ru)
* Bank Otkritie Financial Corporation (Public Joint-Stock Company) operates under Otkritie bank brand name
General license of the Central Bank of the Russian Federation № 2209
Bank Otkritie Financial Corporation ranks 1st among privately-owned banks and 4th by assets among banking groups in Russia5. The Bank has been working in the financial market since 1993.
As at December 31, 2016, total consolidated assets of Otkritie banking group stood at RUB 2,702.7 billion, total equity was RUB 232.0 billion (in accordance with IFRS).
Otkritie bank is a universal commercial bank with a stable diversified business structure and strong capital management. The Bank develops the following key business areas: corporate, investment, retail, small business and Private Banking. Otkritie bank pays special attention to high-tech services: in particular, by implementing the Rocketbank project the Bank intends to develop remote banking services to individuals, Tochka project successfully promotes remote banking services to SMEs.
Otkritie bank has been built up as a result of mergers with more than 10 banks of varying capitalisation and scale, among which there were large banks of federal importance, such as NOMOS-BANK, Khanty-Mansiysk bank and Petrocommerce Bank.
The Bank’s reliability is proved by international rating agencies, i.e. Standard & Poor’s (ВВ-) and Moody’s Investors Service (Ba3).
The major shareholder of Bank Otkritie Financial Corporation is Otkritie Holding, which holds 66.64% of the voting shares. The Bank’s shares are traded on the Moscow Exchange.
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
5 Based on Interfax — CEA ranking in accordance with RAS financial statements as of December 31, 2016