28 Jul 2010 11:51

Vozrozhdenie Bank reduces net profit by 70% in H1, assets up 7%

MOSCOW. July 28 (Interfax) - Vozrozhdenie Bank posted net profit according to Russian accounting standards (RAS) totalling 276.8 million rubles for the first half of 2010, the bank said in a statement.

This was a year-on-year decrease of 70% when the bank posted 937.6 million rubles in net profit.

The bank's total RAS assets stood at 147 billion rubles on July 1, up year-on-year by 7% from 137.3 billion rubles in the same period of 2009.

The chairman of the bank's management board, Dmitry Orlov, was quoted as saying: "Downward trend of the CBR refinancing rate put pressure on the yields loan portfolio that resulted in contraction of the Bank's net interest income by 28.4% comparing to similar period of the previous year. Net interest income decrease was the main reason for net profit contraction. Nevertheless the level of received profit complies with the Bank's business plan for 2010. We still expect to have 500 million rubles of net profit at the yearend".

He also said: "Starting from the beginning of the year we observe deceleration of loan portfolio impairment. Thus, during last six months we charged to provision 1.3 billion rubles while loan portfolio grew by 6.8 billion rubles. In the same period of the previous year charges to provisions amounted to 2.5 billion rubles while volume of loan portfolio remained flat".

The statement said: "Since the beginning of the year the Bank enhanced lending primarily to its core clients - SMEs and employees of the Bank's corporate clients. Corporate loan portfolio grew by 8.5% during the year and reached 86.4 billion rubles. The share of corporate loans comprised 83% of the total loan portfolio. Retail loan portfolio remained flat and amounted to 14.4 billion rubles as of July 1, 2010".

The statement said: "Customer accounts grew by strong 21.7% since the beginning of the year. Retail deposits increased by 34.4% during the year and reached 75 billion rubles accounted for 57% of the Bank's total liabilities as of July 1, 2010".

The bank's equity came to 19.6 billion rubles as of July 1 with a capital sufficiency ratio of 17.5%.

Vozrozhdenie Bank was 21st largest Russian bank by assets at the end of the first quarter of 2010 according to the Interfax-100, compiled by the Interfax.