Rosbank looking to regain pre-crisis net profit level in 2011
MOSCOW. March 24 (Interfax) - Rosbank plans to make as much net profit to International Financial Reporting Standards (IFRS) this year as it did in pre-crisis 2008, the bank's CEO Vladimir Golubkov has told the press.
"In line with the group's [Societe Generale] plans, we will return to making a profit. We will get to the profit level that we had before the crisis, in 2008," Golubkov said.
Rosbank made 628 million rubles in IFRS net profits in 2008, but incurred net losses of 14.369 billion rubles the following year.
The bank's plans for this year including increasing its retail loan portfolio by 17%, Golubkov said. The bulk of that growth is expected to come from mortgage lending. Auto loans will increase 5%-6% and other retail loan products from 10% to 20%, he said.
If mortgage lending increases significantly, but the deposit base is small, then the bank will look at the possibility of issuing mortgage-backed bonds, Golubkov said.
"We are thinking along the lines of some kind of convertible bonds tied to mortgages primarily due to the length of the resource," he said. Rosbank has typically been slow to develop mortgage lending because of an insufficiency of long-term resources, he said.
By stepping up retail lending and selling problem loans, Rosbank plans to cut its past-dues, which now represent 11% of the bank's retail loan portfolio per Russian Accounting Standards (RAS). The goal is cutting that to 7%, the bank's press service said.
The lending organization made a test sale of 1.5 billion rubles worth of problem loans to debt collectors last December, Golubkov said. "We plan to continue selling with the aim of cleaning up our portfolio," he said.
Rosbank does expect its corporate credit portfolio to grow steadily, but any forecast would depend on how the market situation develops in the second half of this year, Golubkov said.
"Cultivating a credit portfolio in conditions of detrimental rates is not very profitable. For growth of 10%-15% we do have sufficient capital and funding. The only question is yield," Golubkov said. The bank is looking to see fundamental growth in its corporate portfolio in the second half, he said.
The unification of Rosbank and Bank Societe Generale Vostok was completed not so long ago, he said. "The potential opportunities for growth are very great," he said. The effect of the merger can be evaluated after the legal procedures for unification are complete, he said.
At present, the consolidation around Rosbank of Societe Generale's Russian banking assets is underway. Rosbank has already become owner of 100% of the charter capital in the banks DeltaCredit and Rusfinans, and plans include joining Bank Societe Generale Vostok to the bank. This consolidation is expected to be completed early in July this year.
The unified bank's assets should exceed 600 billion rubles, and its equity will be around 100 billion rubles, the Rosbank press service said.
Russian banks in the Societe Generale group saw their IFRS net losses to plunge 82% to EUR 35 million from 2009's EUR 197 million. The group itself made EUR 3.917 billion in net profits in 2010.
As per Societe Generale's development strategy for the period until 2015, the expectation is that its Russian subdivisions' contribution to overall retail revenues will increase by 15% by 2012. Profit at Societe Generale's banks in Russia will in 2012 be from EUR 0.9 billion to EUR 1.1 billion, according to the group's analysts.
Rosbank ended 2010 in 11th place by asset volume, Bank Societe Generale Vostock in 30th, Rusfinans in 48%, and DeltaCredit in 71st place on the Interfax-100 ranking of Russian bank size.
