Alfa-Bank announces financial results for the 1H 2014

The Alfa Banking Group, which includes Alfa-Bank and its subsidiaries, reported IFRS financial results for the first half 2014.

In the reporting period the Alfa Banking Group recorded an increase in its total assets by 2.4% to USD 49.8 billion as of June 30, 2014 from USD 48.6 billion as of December 31, 2013. During the period, total gross corporate loans increased by 3.0% to USD 28.6 billion (USD 27.8 billion as of December 31, 2013), while total gross loans to individuals increased by 12.8% to USD 7.0 billion (USD 6.2 billion at December 31, 2013).

The Alfa Banking Group has maintained its position as the top Russian private bank by total assets, total equity, customer accounts and loan portfolio. Market share in the retail segment is growing and stood at 3.0% (retail lending) and 6.9% (retail demand accounts) as of 30 June, 2014 according to management computation and CBR statistics. At the same date market share in corporate lending stood at 3.1%.

During the first half of 2014 Alfa Banking Group expanded its funding base, with total customer accounts growing by 6.0% to USD 28.3 billion from USD 26.7 billion at December 31, 2013. The funding structure of the Group remained stable, with corporate customer accounts, retail customer accounts and wholesale funding (including interbank) each accounting for approximately one third of total liabilities. Total equity increased by 4.3% to USD 5.0 billion.

Alfa Banking Group reported solid growth in key business segments with net interest income and net fee and commission income up by 10.8% and 10.6% year-on-year respectively. Operating profit before provisioning increased by 5.4% to USD 1 534 million (1H 2013 — USD 1 455 million). Lower net profit of USD 237 mln (1H 2013 — USD 479 million) was caused by higher provisioning charges (USD 551 mln in 1H 2014) reflecting increased credit risks in the current adverse environment and the Group’s constantly conservative approach to provisioning.

On 10 June 2014 Alfa Banking Group issued EUR 350 million 3-year Loan Participation Notes, becoming the first Russian banking group successfully to close a deal on the international markets in 2Q 2014. In June 2014 Alfa Bank also successfully issued RR 10 000 million (USD 298 million equivalent) bonds with 36 months maturity.

In March 2014, Fitch Ratings confirmed the long term credit rating of Alfa-Bank at BBB-, negative outlook. Alfa-Bank remains the only privately owned Russian bank with an investment grade rating assigned by one of the leading international rating agencies. In April 2014, Standard & Poor’s affirmed the long-term credit rating of Alfa-Bank at BB+, negative outlook. In June 2014, Moody’s confirmed their rating at Ba1 with a stable outlook.

The Alfa Banking Group’s first half 2014 IFRS figures have been reviewed by PricewaterhouseCoopers.