The Alfa Banking Group, which includes Alfa-Bank and its subsidiaries, reported IFRS financial results for the first half 2015.
In terms of macroeconomic instability and market volatility the Alfa Banking Group reported operating profit before provisioning in the amount of USD 1 056 million in 1H 2015. In RUB terms operating profit before provisioning increased by 13.0% during the reporting period.
Net interest income declined to USD 659 million. In RUB terms the decrease was 9.1%, which reflects the Bank’s decision to limit loan portfolio growth due to macroeconomic risks increase and borrowers quality deterioration. Net fee and commission income amounted to USD 271 million in 1H 2015. The share of fee and commission income in operating profit before provisioning remains high — more than 25%. Net profit for the reporting period amounted to USD 32 million.
The Alfa Banking Group demonstrated strong operating efficiency in 1H 2015. Cost to income ratio was 45.4% (the ratio of Alfa-Bank on a standalone basis reached the level of 41.6%). Operating expenses decreased by 25.4% to USD 479 million in 1H 2015 compared with USD 642 million in 1H 2014.
Total equity increased by 2.5% to USD 4 405 million in 1H 2015 compared with USD 4 296 million in 2014. The Alfa Banking Group maintained high level of capital adequacy ratios under Basel I Capital Accord: total capital adequacy ratio increased by 2.1 percentage points to 19.8%, tier 1 ratio increased by 1.6 percentage points to 14.4%.
Total assets amounted to USD 36 539 million as of June 30, 2015, decreased by 16.1% compared with USD 43 566 million as of December 31, 2014.
Gross loan portfolio amounted to USD 26 060 million as of June 30, 2015 compared with USD 28 105 million as of December 31, 2014. Loan portfolio reduction was due to low economic activity of population and enterprises as well as the Alfa Banking Group’s lending approach, aimed at maintaining the quality of the loan portfolio. Corporate loan portfolio amounted to USD 22 032 million as of June 30, 2015, decreased by 6.4% compared with USD 23 532 million as of December 31, 2014. Retail loan portfolio declined by 11.9% to USD 4 028 million as of June 30, 2015 compared with USD 4 573 million as of December 31, 2014.
Loan portfolio quality dynamics was in line with the banking sector trends. Non-performing loans ratio (more than 90 days overdue) was 6.2% as of June 30, 2015 compared with 2.7% as of December 31, 2014. NPL 90+ coverage ratio remained at a conservative level (about 108%).
Total liabilities amounted to USD 32 134 million as of June 30, 2015. Customer accounts increased to USD 20 611 million as of June 30, 2015 compared with USD 20 059 million as of December 31, 2014, the share in total liabilities was 64.1% as of June 30, 2015. Retail customer accounts remained stable and amounted to USD 12 105 million. Corporate customer accounts increased by 6.3% to USD 8 506 million as of June 30, 2015.
«We are satisfied with the results. Our strategy of selective growth and maximizing risk-free income has proven its efficiency even in the difficult market conditions. Particularly we are pleased to notice the increasing confidence in all market segments: the average market share of retail demand deposits increased from 7.24% to 8.00%, the average market share of corporate lending grew from 3.18% to 3.24%, the number of clients in Mass corporate segment increased from 140 000 to 174 000. All these figures demonstrate the growing importance of Alfa-Bank in the financial system. The most important success factors are team efforts in achieving the best results and high quality of management team. I would like to use this opportunity to thank all Bank’s customers for their trust and express confidence in further improvement of the Bank’s financial performance and technological leadership» — commented Alexey Marey, Chief Executive Officer of Alfa-Bank.
The Alfa Banking Group’s first half 2015 IFRS figures have been reviewed by PricewaterhouseCoopers.