1. finance
2. bank

Investor Presentation
April 2015
B&N Bank Overview and Strategy
1
B&N Bank at a glance (IFRS Financial Statements for 2014)
B&N Bank (“B” rated by S&P) is a strongly growing universal bank
with a focus on corporate business and an extensive branch
network across 50 regions of the Russian Federation (185 offices of
B&N Bank and 154 offices of B&N Bank Credit Cards as of January
1, 2015).
The Bank holds a solid position in the Russian banking market:
Financial highlights as of
December 31, 2014*
In thousands
RUB
Assets
Loans to customers
• #20 in “Top-200 Russian banks in terms of net assets” as of
January 1, 2015 (“Profile” business magazine)
• #27 in “Top-200 Russian banks in terms of equity” as of January
1, 2015 (“Profile” business magazine)
• #3
in “Top-100 most reliable privately-owned banks” as of
January 1, 2015 (“Profile” business magazine)
• Included in the list of 27 Russian banks which are permitted to
portal
• The Bank’s shareholders regularly provide support to the Bank:
in April 2015 Tier 1 capital was increased by RUB 6bn via
additional share issue
7 551 026
+95%
214 176 810
3 807 019
+57%
30 715 858
545 978
+69%
Total capital
44 704 142
794 622
+74%
394 092 799
7 005 048
+98%
263 908 410
4 691 005
+53%
Liabilities
Customer accounts
Net interest income (before
provisions)
12 176 327
216 436 +101%
Net non-interest income
16 489 488
293 103 +173%
Net profit
3 921 603
69 707
5х
General ratios as of
December 31, 2014
• Recognized as the first privately-owned bank authorized to pay
• Recognized as the Bank of the Year 2014 according to Banki.ru
424 808 657
Tier 1 capital
get capital injections through federal loan bonds (OFZ) from
Deposit Insurance Agency (DIA)
pensions to Russian citizens
In thousands
Growth
US dollars**
NIM
4.4%
CIR
44.2%
ROAA
1.2%
ROAE
16.0%
NPL 90+
5.8%
* According to IFRS Consolidated Financial Statements
** Converted at CBR rate RUB/USD 56.2584 as of 31.12.14
2
B&N Bank key credit highlights
Continued support from
financially independent
shareholders
Developed branch
network in Moscow and
Russian regions
Diversified client base
and liability structure
Low level of NPLs,
healthy liquidity profile,
and excellent credit
history
Strong position in the
retail deposit market
The best expertise in
financial rehabilitation
and M&A deals in the
banking sector
Implementation of a new
IT platform for increasing
capacity of transactions
Implementation of joint
projects with McKinsey &
Co, Roland Berger and
Oliver Wyman for
strategy, financial and
risk management
3
B&N Bank has a timely and strong support from its shareholders
Current shareholding structure
Mikail Shishkhanov
•
HANBERG FINANCE
LIMITED– 39.36%
•
•
•
Mikail Shishkhanov
– 1.64%
Other – 1.22%
RIZANTO
SECURITIES
INC–2.80%
•
LLC
“TradeWest”54.98%
•
•
•
•
•
Majority shareholder of 59.4% of B&N
Bank (LLC “TradeWest”, RIZANTO
SECURITIES INC.)
Member of the Board since 1994
President of the Bank since 1996
Acquired current shareholding from Mikail
Gutseriev (a close relative) in 1996
Manager of the Year 2008 in Banking Sector (“Company”
Magazine)
Ranked #155 among TOP-200 Wealthiest Russian Businessmen
(Forbes, 2014)
Ranked #4 among TOP-1000 Russian Managers 2014 (Manager
Association, Russia)
Education: Peoples’ Friendship University; Finance Academy under
the Government of the Russian Federation, Moscow
PhD degree in Law, Doctor in Economic Sciences
In the times of the global financial crisis in 2008, Mr. Shishkhanov provided B&N Bank with sufficient capitalization without
any support from the state. To ensure a further growth of B&N Bank the majority shareholder continued to strengthen its
capitalization, including:



Subordinated loans (USD 150mln in 2008-2010, USD 50mln in 2012 and RUB 1bn in 2013)
Tier 1 capital injections by additional share issue (RUB 1.5bn in 2011 and RUB 6bn in 2012-2013)
Tier 1 capital injections by debt-free financing (RUB 3bn in 2012-2013, RUB 1.8bn in 2014)
4
In 2014 a new shareholder entered B&N Bank’s capital
Mikail Gutseriev
•
•
•
•
•
Oil Company RussNeft at a glance
•
Mikail Gutseriev is the Chairman of the
Board of Directors and owner of the oil
company “RussNeft”.
Ranked
#33
among
TOP-200
Wealthiest
Russian
Businessmen
(Forbes, 2014)
Founder of a number of social and
charity organizations
Education: Institute of Technology (Jambyl, Kazakstan),
chemical engineer; Gubkin Russian State University of Oil and
Gas (Moscow), engineer; Finance Academy under the
Government of the Russian Federation (Moscow), economist;
St. Petersburg University of Law, lawyer.
PhD degree in Law, Doctor in Economic Sciences
•
•
•
•
•
•
•
•
•
Ranks #10 among Russian oil companies
by crude oil production
Ranks #8 among Russian oil companies
by natural gas production
Annual oil production is 17 mln tons
Annual gas production is 2.3 BCM
Recoverable oil reserves are 765 mln tons
Recoverable gas reserves are 177 BCM
45 producing assets in 16 regions of the Russian Federation
167 oil-and-gas fields are under exploration
Over 21 000 employees
Planned oil and gas production by 2017 is 19 mln tons and 2.5
BCM respectively
•
In April 2015 the Central Bank of the Russian Federation registered a report on results of B&N Bank’s additional share issue.
Securities were placed in favor of Hanberg Finance Limited owned by Mikail Gutseriev.
•
After the additional share issue B&N Bank’s equity increased by RUB 6bn and amounted to RUB 41bn (RAS). As a result, now
B&N Bank President Mikail Shishkhanov holds 59.4% of the Bank’s shares and Mikail Gutseriev – about 39.4% (as of 31.12.
2014 B&N Bank’s President Mikail Shishkhanov held 77.77% of the Bank’s shares and Mikail Gutseriev – 20.61%).
5
B&N Bank has extensive branch network across Russia
•
•
Russian
Federation
•
B&N Bank branch network structure
As of January 1, 2015
As of January 1, 2015 the Bank’s branch
network accounted for 339 offices (including
offices of B&N Bank Credit Cards).
Given the existing branch network of the ROST
group acquired by the Bank in 2014 as part of
the financial recovery program, B&N Bank’s
branch network currently exceeds 530 outlets.
The total number of ATMs over the consolidated
B&N Bank group is 2,390 pcs.
B&N Bank Credit Cards branch network structure
Q-ty
As of January 1, 2015
Q-ty
Regions of presence
40
Regions of presence
25
Points of sale, including:
185
Points of sale, including:
154
Branches
7
Branches
3
Operational offices
103
Operational offices
113
Sub-branches in Moscow region and RF regions
73
Sub-branches in Moscow region and RF regions
38
Operating cash desks in Moscow and regions
1
Operating cash desks in Moscow and regions
0
Representative offices
1
Representative offices
0
Number of employees
5555
Number of employees
2535
6
B&N Bank has strengthened its regional business franchise through
acquisition of several credit organizations
•
B&N Bank
Credit Cards
SKA-Bank
DNB Bank
•
Akkobank
B&N Bank
Rost Bank
•
Uralprivatbank
KEDR Bank
•
Tveruniversalbank
In 1H2014 B&N Bank acquired 79.18% stake in
Moscomprivatbank (affiliated with Ukranian PrivatBank). The
deal was concluded as part of B&N Bank’s strategy aimed at
the expansion of the retail and plastic cards business. The bank
was renamed “B&N Bank Credit Cards” (224 offices at the date
of acquisition).
For the purpose of entering the market of Murmansk region
B&N Bank also acquired DNB Bank (7 offices), having a stable
base of retail and corporate customers in this region. In
January, 2015 according to the approval of the Central Bank of
the Russian Federation DNB Bank was renamed “B&N Bank
Murmansk”.
In December 2014 B&N Bank acquired five banks of the ROST
Bank group (RUB 119bn of assets as of January 1, 2015). The
deals were concluded as part of financial rehabilitation
procedure of Rost Bank (99 offices), KEDR Bank (89 offices),
Akkobank (15 offices), SKA-Bank (19 offices) and
Tveruniversalbank (14 offices).
In March 2015 B&N Bank also acquired Uralprivatbank (4
offices) in Yekaterinburg from the companies affiliated with the
former owners of the ROST group.
These mergers will allow B&N Bank:
 To achieve its strategic goals on the main business segments within
the shortest time span (3 years ahead of the schedule)
 To expand its client base and regional presence (more
than 400 additional offices in strategically important regions
of the Russian Federation)
 To be ranked among Top-10 biggest Russian banks and to
become the best privately-owned bank in Russia by 2020
7
B&N Bank successfully implements the program of integration of the
ROST group banks
Banks of B&N Bank group in terms of assets, RUB bn
•
•
317
80
70
27
7
6
4
2
1
B&N Bank Credit Cards has been consolidated to
B&N Bank group starting from July 2014; the full
rebranding to be completed in 1H2015.
DNB Bank (B&N Bank Murmansk)- the process of
integration to be completed in 1H2015. As a result,
five offices of DNB Bank located in Murmansk region
will become B&N Bank’s sub-branches.
•
SKA-Bank, Akkobank and Uralprivatbank – to be
integrated as operational offices during 2015.
•
Tveruniversalbank and KEDR Bank – to be
integrated as operational offices in 1H2016.
•
Rost Bank – business to be transferred to B&N
Bank’s balance sheet and IT integration to be
completed in 2016.
Principles of integration of the ROST group banks
 Transfer of the subsidiary banks to the technological platform and business processes of B&N Bank
 Launch of the project for cost reduction over the whole B&N Bank Group
8
B&N Bank group today
# 7 among the biggest Russian banking groups in
terms of total assets (RUB 670bn)
•
# 4 in the ranking “Bank in the eyes of the
customers”
•
# 3 among Russian banks in terms of efficiency of
the corporate web site
# 4 among privately-owned banks in terms of retail
deposits
# 7 in terms of bank cards issuance
•
# 10 in terms of branch network scope
Included in TOP-400 biggest Russian companies
according to “Expert” business magazine
Included in TOP-1000 biggest banks of the world
according to The Banker
•
Today B&N Bank group consists of 9
banks (66 regions of presence (including
London and Athens), 177 cities (including
London and Athens), more than 530
offices.
Network management will be carried out
through regional directorates. Total
number of directorates has increased to
10 in connection with the opening of three
new directorates – Central (based on
offices of B&N Bank Credit Cards), FarEastern (based on offices of the ROST
group in Far Eastern Federal District),
East Siberian (based on offices of KEDR
Bank in Krasnoyarsk region and Republic
of Khakassia).
The main goal for 2015 is a balanced
development of the branch network:
closing of concurrent branches (41);
escape from the small towns which do not
comply with the Bank’s strategy (14);
closing of inefficient offices (38);
maintenance of the branch reformatting
program (27).
As of 01.01.2016 the consolidated branch
network of B&N Bank group will account
for 450 offices.
9
Credit ratings reflect a stable financial position
International Rating Agencies
Long-term B
Short-term B
According to national scale ruBBB+
Outlook ‘Negative’
B&N Bank current credit ratings:
•
•
National Rating Agencies
•
Credit rating
AA+/BBB+
Outlook ‘Stable’
Credit rating АА
Credit rating A+
Outlook
‘Developing’
•
In February 2015 Standard & Poor’s
affirmed B&N Bank’s long- and short-term
issuer credit ratings at ‘B/B’ and revised
the outlook to negative from developing on
increased economic risks in Russia.
In October 2014 RusRating CJSC raised
the Bank’s credit ratings on the national
and international scales from ‘AA/BBB’ to
‘AA+/BBB+’ following its positive outlook.
Rating increase reflects steady growth
coupled with appropriate capital formation;
an increasingly diversified business; an
equity investment by M. Gutseriev and
plans for a further increase in his stake;
and significant business contacts and
lobbying capacity via the Bank’s beneficial
owners.
In September 2014 National Rating
Agency LLC affirmed the Bank’s credit
rating at ‘AA’.
In February 2015 Expert RA Rating
Agency affirmed ‘A+’ credit rating with
developing outlook.
10
B&N Bank has clear strategic targets looking into 2020
•
B&N Bank has developed a clear-cut strategy until 2020 in conjunction with McKinsey & Co.
Business model
2012-2015
•
•
Creation of integrated business-planning
system and infrastructure for active growth
of business divisions
Corporate Business
Factoring
Corporate
&
Corporate
& Financial Institutions
and DCM
Investment
Bank
Investment
Bank
•
Implementation of the best market practices
•
Credit rating upgrade
•
2016-2020
Transformation of B&N Bank’s business
model into two blocs – Corporate and
Investment Bank and Retail Bank
•
•
•
Open Markets
Mass
segment
Implementation of innovations to support
the outrunning business growth in relation
to market
Ranking among TOP-10 Russian
commercial banks in terms of assets
Credit rating increase to BB+ (S&P rating
agency grade)
Retail Bank
Retail Business
B&N Bank
Premium
Bank Cards
B&N Bank
Exclusive
Retail Bank
SME
Preparation for IPO or stake sale to a
strategic investor
* KEDR Bank and Rost Bank will be maintained as standalone legal entities with their own
brands up to the date of their full integration with B&N Bank
11
In 2014 B&N Bank achieved strong results on its strategic
business segments* (1/2)
Corporate & Investment Bank
CORPORATE BUSINESS
•
•
In 2014 the loan portfolio amounted to RUB 78bn; corporate customer funds amounted to RUB 43bn; portfolio of guarantees increased to RUB
20bn.
Tasks implemented in 2014: decrease in the share of the real estate related sectors in the loan portfolio; increase in the portfolio of guarantees;
acquisition of new customers; increase in financing for existing customers from manufacturing and power engineering sectors; geographic
expansion; development of corporate lending process based on the best practices; increased share of customers with international credit rating
(increase in assets accepted as collateral for loans of the Central Bank of the Russian Federation).
FACTORING (via related company POLITEKS)
•
•
In 2014 LLC “POLITEKS” ranked # 12 in terms of portfolio size and # 16 in terms of business volume. At the same time the company improved its
ranking in terms of financial performance.
As of 01.01.2015 the factoring portfolio amounted to RUB 4.03bn; the volume of the assigned receivables amounted to RUB 16bn.
FINANCIAL INSTITUTIONS AND CAPITAL MARKETS
•
•
•
Since the beginning of 2014 series 06 and 07 of Euro-Commercial Papers for a total amount of USD 72mln have been placed under the USD
300mln ECP Programme. The number of investors participating in the placement of ECP has increased twice over the last year. Geography of
investors is represented by the following countries: Switzerland, Russia, France, UK, the Netherlands, Australia, USA, Hong Kong.
During 2014 B&N Bank placed 6-year BO-04 and BO-05 exchange bonds worth RUB 2bn each and additional issues to BO-02, BO-03 and BO04 for the total amount of RUB 11bn.
In 2014 269 transactions for the total amount of RUB 11bn were executed (including short - and long-term trade finance, ruble-denominated letter
of credit, export letter of credit and guarantees).
* According to management accounts for 2014
12
In 2014 B&N Bank achieved strong results on its strategic
business segments* (2/2)
Retail Bank
RETAIL BUSINESS
•
•
•
•
•
•
In 2014 the number of retail customers increased by 172 thousand and accounted for 1 578 thousand.
The loan portfolio increased to RUB 56bn; the deposit portfolio amounted to RUB 205bn.
In 2014 the Bank managed to strengthen its market share in retail deposits.
B&N Bank became the first privately-owned credit organization in Russia authorized by Pension Fund of the Russian Federation to pay pensions
to citizens. It was agreed to provide services to 3.5 million people.
In 2014 the loan portfolio on credit cards increased by RUB 7.7bn and amounted to RUB 31.4bn.
In 2014 651 thousand of plastic cards were issued.
B&N EXCLUSIVE
•
•
•
•
In 2014 the number of clients of B&N Exclusive segment increased by 10%.
At 2014 year-end the loan portfolio amounted to RUB 406mln.
Total deposit portfolio of the segment amounted to RUB 24.4bn (including RUB 14.7bn in the regional directorates).
Commission income of the segment for 2014 amounted to RUB 98.6mln.
SME SECTOR
•
•
•
•
The SME loan portfolio as of 01.01.15 amounted to RUB 6bn.
Total deposit portfolio and on-demand funds amounted to RUB 1bn and RUB 8.9bn respectively.
Commission income in 2014 amounted to RUB 650mln.
In 2015 the Bank plans to launch special offers and campaigns for target client groups, to search new sales channels (agent sales, tender
platforms etc.), to develop channels of telebanking services and to unify the products with the subsidiary banks.
* According to management accounts for 2014
13
B&N Bank has a strong and established credit history
•
2005
2006
2007
2008
2010
• US$50mln LPN Programme, 1 year (BCP Securities LLC)
• US$200mln Eurobonds, 3 years (Commerzbank AG, Merrill Lynch)
•
•
US$52mln syndicated loan, 1 year (LandesBank Berlin, RBI (Austria), VTB Deutschland)
•
• US$27mln syndicated loan, 1 year (LandesBank Berlin, VTB)
•
RUB 1bn domestic bonds 02, 3 years (B&N Bank)
•
• US$50mln syndicated loan, 1 year (LandesBank Berlin, RBI (Austria), VTB Deutschland )
2011 • RUB 3bn exchange bonds BО-01, 3 years (ATON, Sberbank CIB)
• US$300mln ECP Programme (BCP Securities, The Royal Bank of Scotland, VTB Capital) registered
and issued Series 01 and 02 under the Programme
2012 • US$80mln syndicated loan, 1 year (Alfa-Bank, VTB Deutschland, RBI (Moscow) & RBI (Austria)
RUB 2bn exchange bonds BО-03, 3 years (OTKRITIE, NOMOS-BANK, VTB Capital)
• RUB 3bn exchange bonds BО-02, 3 years (OTKRITIE, NOMOS-BANK, REGION BC)
2013 • Issued Series 03, 04 and 05 under ECP Programme (BCP Securities, VTB Capital)
•
•
• RUB 2bn exchange bonds BO-04, 6 years (OTKRITIE, NOMOS-BANK, Russian Agricultural Bank,
Unicredit (Moscow), ZAO Raiffeisen Bank (Moscow)
• RUB 2bn exchange bonds BO-05, 6 years (OTKRITIE, REGION BC)
2014 • Issued Series 06 and 07 under ECP Programme (BCP Securities, Raiffeisen Bank International AG
and REGION BC)
• RUB 2bn exchange bonds BO-06, 6 years (OTKRITIE, REGION BC)
• RUB 2bn exchange bonds BO-07, 6 years (OTKRITIE, REGION BC)
2015 • RUB 3bn exchange bonds BO-08, 6 years (OTKRITIE, REGION BC, Vneshprombank)
• RUB 3bn exchange bonds BO-09, 6 years (OTKRITIE, REGION BC, Vneshprombank)
•
B&N Bank entered the international
capital markets with a US$50mln
private placement in 2005 and its debut
US$200mln Eurobond issue in 2006.
In 2009 B&N Bank repaid all the
external borrowings during turbulent
market environment and confirmed its
reputation of a reliable partner.
In 2010 B&N Bank renewed its activity
in domestic and international debt
capital markets with a number of bond
issues and syndicated loans.
In 2014 B&N Bank placed 6-year
BO-04 and BO-05 exchange bonds of
RUB 2bn each (plus additional issues
to BO-02, BО-03 and BО-04 totaling
RUB 11bn) and series 06 and 07 of
Euro-Commercial
Paper
totaling
US$72mln with maturities of 12 and 6
months respectively.
In 1Q2015 B&N Bank placed 6-year
BO-06 and BO-07 exchange bonds for
the total amount of RUB 4bn and
additional issues to BO-03 and BO-04
for the total amount of RUB 4bn. In
April 2015 the Bank placed BO-08 and
BO-09 exchange bonds for the total
amount of RUB 6bn.
Currently the Bank has outstanding
exchange bonds of series BO-02 – BO09 for the total amount of RUB 34bn
(including the additional issues).
14
B&N Bank is active in international and local debt capital markets
US$300 mln ECP Programme
Series
01
Amount, $
mln
40
Date of issue
August 2012
Repayment date
Repaid
Maturity,
months
6
Yield
8.25%
Arrangers
BCP Securities,
The Royal Bank of
Scotland,
VTB Capital
BCP Securities,
The Royal Bank of
Scotland,
VTB Capital
02
17
October 2012
Repaid
6
7.50%
03
60
February 2013
Repaid
12
7.50%
BCP Securities,
VTB Capital
04
11.8
June 2013
Repaid
12
6.75%
BCP Securities,
VTB Capital
05
22
November 2013
Repaid
12
6.70%
BCP Securities,
VTB Capital
06
47
March 2014
Repaid
12
7.50%
BCP Securities,
Raiffeisen Bank
International AG,
REGION BC
07
25
March 2014
Repaid
6
6.25%
BCP Securities
15
B&N Bank is active in international and local debt capital markets
Local exchange-traded bonds
Series
Amount,
RUB bn
Date of issue
Repayment date
Put option
Coupon
Arrangers
Lombard List/
Top quotation list
BO-01
3
December 2011
Repaid
_
10.95%
ATON, Sberbank CIB
Yes/Yes
BO-02
9
September 2013
September 2016
September 2015
12.25%
OTKRITIE, NOMOSBANK, REGION BC
Yes/Yes
BO-03
5
July 2013
July 2016
July 2015
12.25%
OTKRITIE, NOMOSBANK, VTB Capital
OTKRITIE, NOMOSBANK, Russian
Agricultural Bank,
Unicredit (Moscow),
ZAO Raiffeisen Bank
(Moscow)
Yes/Yes
BO-04
8
February 2014
February 2020
February 2016
17%
Yes/Yes
BO-05
2
December 2014
December 2020
December 2015
14%
BO-06
2
January 2015
January 2021
January 2016
18%
OTKRITIE, REGION
BC
OTKRITIE, REGION
BC
BO-07
2
January 2015
January 2021
January 2016
18%
OTKRITIE, REGION
BC
Yes/Yes
BO-08
3
April 2015
March 2021
April 2016
15%
OTKRITIE, REGION
BC, Vneshprombank
To be included/Yes
BO-09
3
April 2015
March 2021
April 2016
15%
OTKRITIE, REGION
BC, Vneshprombank
Yes/Yes
Yes/Yes
To be included/Yes
16
Risk Management
17
Efficient risk management as a key aspect for success
Credit risk
•
•
•
•
•
•
•
•
Operational risk
•
•
•
•
•
ALM risk
•
•
•
•
•
Market risk
Liquidity risk
•
•
•
•
•
•
•
•
•
•
Fixing of limits for credit operations (products, industries, exposure per borrower, etc.)
Adjustment of decision-making strategy, stop parameters for products
Credit investigation and independent underwriting
Application of the advanced risk assessment patterns (scoring)
Accepting liquid assets as collateral and insurance of such assets
Regular monitoring of the key risk factors
Active work with problem debts
Fixing of interest rates covering expected losses
Collection and analysis of information on incidents
Process verification and recommendations for risk minimization
System risk monitoring (self-assessment, indicators, controls)
Coordination of the local risk managers in all subdivisions and decision-making processes for operational risk
Quarterly monitoring of the interest risk on the basis of gap analysis and stress testing of the Bank’s balance
sheet
Scenario analysis aimed at the assessment of the influence of interest rate fluctuations on the Bank’s financial
performance
FTP system, asset and liability management, optimization of the funding structure
Fixing of limits for net FX position and losses from currency revaluation
Monthly monitoring of the currency risk and losses from currency revaluation
Fixing of limits for investments in instruments of financial and stock markets and for losses from revaluation of
security portfolio
Diversification of the Bank’s security portfolio
REPO operations: secured interbank loans
Monitoring of financial and stock markets
Monitoring of the risk level: yield spread, portfolio duration, financial performance
VaR-assessment of losses on security portfolio
Daily monitoring of CBR liquidity ratios
Preparing of payment schedules (planning) and monitoring by ALCO and Executive Board
Creation of liquidity cushions
Working out of plans on the basis of scenario analysis of liquidity outflow
Setting and monitoring of the survival horizon; diversification of assets and funding base
18
Financial Performance in 2014
19
B&N Bank supports a balanced structure of assets and liabilities
Assets structure
Liabilities structure
December 31, 2014
December 31, 2014
Other - 10%
Cash and
balances with
CBR - 8%
Due from banks - 28%
Securities - 1%
Individual customer
accounts - 53%
Subordinated
debt - 4%
Other - 7%
Investments
available for
sale - 6%
RUB 424.8
bln
Loans to customers 50%
Debt securities
issued - 6%
RUB 394.1
bln
Due to banks - 13%
Corporate customer
accounts - 14%
•
•
Total assets of the Bank increased by 95% and
amounted to RUB 424.8bn (RUB 217.4bn in 2013).
Asset growth was mainly driven by 57% increase in
the loan book to RUB 214.2bn (RUB 136.3bn in
2013) and the funds due from banks in connection
with redistribution of funds within the Group as part of
the rehabilitation procedure.
•
•
Total liabilities of the Bank as of 2014 year-end
increased by 98% and amounted to RUB 394.1bn
(RUB 199.2bn as of 2013 year-end).
Growth in liabilities was driven by the increase in
customer accounts up to RUB 263.9bn (+53%) and
debt securities issued up to RUB 23.5bn (+81%) due
to the placement of 6-year BO-04 and BO-05
exchange bonds totaling RUB 4bn (as well as
additional issues to BO-02, BО-03 and BО-04
totaling RUB 11bn) and US$47mln ECP issue of
series 06.
20
B&N Bank has a balanced and diversified loan portfolio
Net loan portfolio dynamics, RUB bn
+22%
+26%
+20%
+59%
+57%
•
214.2
•
136.3
85.6
56.4
71.3
46.1
79%
2009
88%
91%
89%
2010
2011
Corporate loans
2012
87%
80%
•
2013
2014
Retail loans
Loan portfolio* by sector as of 31.12.14
Real estate - 5%
Other - 3%
Factoring - 2%
Production - 6%
Oil & Gas - 6%
Construction - 3%
Investments & other
financial services - 11%
RUB 224.1
bln
Individuals - 22%
Trading - 38%
•
•
In 2014 the loan portfolio grew by 57% and
reached RUB 214.2bn after the deduction of
provision for impairment or 50% of the total
balance.
Corporate loans increased by 44% and
amounted to RUB 171.2bn (less provision for
impairment), representing the majority of the
loan book. Corporate loans made 80% of the
total portfolio.
The Bank also managed to strengthen its
position in the retail lending market, partly due
to the acquisition of Moscomprivatbank. As a
result, the retail loan portfolio increased by
144% and amounted to RUB 43bn (vs. RUB
17.7bn in 2013).
SME loans accounted for 3% of the total loan
portfolio.
About 60% of B&N Bank’s total loan portfolio is
secured. The main types of collateral are
represented by real estate, land plots, corporate
guarantees, transport and equipment. The
remaining part of loans is secured by controlling
stakes in companies.
Other services - 4%
* Before deduction of provisions for impairment
21
B&N Bank focuses on the monitoring of the loan book quality
•
•
Loan portfolio dynamics and NPL**,
RUB mln
As of January 1, 2015 NPL 90+ ratio stood at 5.8% of
the total loans in line with the market averages. The
ratio slightly increased in comparison with 2013 yearend due to the integration of B&N Bank Credit Cards.
Industry concentration on real estate and construction
continued to reduce and as of 2014 year-end declined
to a comfortable level of 8% of the gross loan book or
57% of the Tier 1 capital.
214.2
9.6%
4.9%
4.8
Dynamics of the borrower* and industry
concentrations in the loan book
50%
51%
34%
27%
8%
2011
Top-20 borrowers
2012
2013
•
•
14%
2010
2010
3.3%
4.3
2011
Loan portfolio
•
41%
29%
2009
2009
4.6
5.8%
3.6%
85.6
3.5
4.3
2012
2013
LLP
NPL 90+
10.0
2014
51%
46%
33%
71.3
56.4
46.1
48%
136.3
6.8%
2014
Top-20 borrowers concentration also continued to
decline and came to 29% of the gross loans.
Loan loss provisions grew due to a significant increase in
the retail loan book.
Related party lending is moderate – 2.6% of the gross
loan book (in line with the average indicator for related
party lending in the Russian banking market).
Real estate/Construction
* Only credit commitments (without contingencies)
** NPLs 90+ are calculated on the basis of the management accounts
(less guarantees and LCs)
22
B&N Bank holds a highly liquid securities portfolio with a focus on
fixed income instruments
Securities trading portfolio, RUB bn
+87%
-10%
+14%
-29%
-52%
18.0
17.6
Reclassified assets
OFZ - 2%
Corporate bonds - 47%
Bonds of banks – 26%
15.8
12.7
9.4
6.1
2009
•
•
•
•
2010
2011
2012
2013
Municipal
bonds - 25%
RUB 16.2
bln
2014
In 2014 trading security portfolio decreased to RUB 6.1bn due to the reclassification of securities totaling RUB
16.2bn from financial assets at fair value through profit or loss to investments available for sale. The decision was
due to economic volatility which led to a liquidity deficit, increase in the rate of inflation and uncertainty about the
economic growth.
Trading securities portfolio is mainly represented by US Treasury bonds (96%).
Portfolio of the reclassified assets totaling RUB 16.2bn is mainly represented by corporate and bank bonds admitted
to CBR Lombard list.
Portion of corporate shares in B&N Bank’s security portfolio is 4%.
23
Strong deposit base with a special focus on private deposits
Customer accounts, RUB bn
+28%
+19%
+36%
+26%
Sector analysis of customer deposits
+53%
263.9
Insurance & financial
services - 8%
Individuals - 79%
172.0
Services - 3%
136.5
100.3
65.8
84.2
21%
29%
31%
37%
38%
21%
2009
2010
2011
2012
2013
2014
Corporates
•
•
•
•
RUB 263.9
bln
Production - 3%
Trading - 2%
Other - 5%
Individuals
Customer accounts increased by 53% to RUB 263.9bn.
Retail deposits represent the majority of the client funding base (79% of the customer accounts or 53% of the total
liabilities). They increased from RUB 106bn to RUB 209.4bn (+97%).
Fixed term deposits represented 90% of the total customer deposits.
According to “Expert” business magazine B&N Bank ranked # 10 among 20 biggest banks in terms of retail deposits.
24
B&N Bank supports an adequate capitalization level
Capital dynamics and capitalization,
RUB bn
44.7
•
•
25.8
18.5
9.7
10.3
•
11.5
14.1%
6.7
11.5%
6.9
10.3%
7.7
2009
2010
2011
Tier 1 capital
11.5%
12.1%
12.5
18.2
10.9%
30.7
2012
2013
2014
Tier 2 capital
•
CAR (Basel I/II)*
Tier 1 and Tier 2 capital injections,
RUB bn
44.7
•
25.8
18.5
10.3
11.5
+1.5
+1.5
+1.5+1.5
+1.5
+5.5
+5.5
2010
2011
2012
+5.5 +6.0
+6.0
+6.0
+4.0
+8.3
2013
2014
Tier 1 capital increased to RUB 30.7bn (+69%) due to
capital injections and current revenues.
In June 2014 the owner of the oil company “RussNeft”
Mikail Gutseriev became the shareholder of B&N Bank
via the additional share issue of RUB 4bn. As of
31.12.2014 B&N Bank’s President Mikail Shishkhanov
held 77.77% of the Bank’s shares and Mikail Gutseriev
– 20.61%.
Tier 1 capital ratio per Basel II stood at 7.5% (Tier 2
CAR – at 10.9%), which is well above the minimum
regulatory requirements and ensures a healthy
capitalization.
In April 2015 the Central Bank of the Russian
Federation registered a report on results of B&N
Bank’s additional share issue. Securities were placed
in favor of Hanberg Finance Limited owned by Mikail
Gutseriev. After the additional share issue B&N Bank’s
equity increased by RUB 6bn and amounted to RUB
41bn (RAS). As a result, now B&N Bank President
Mikail Shishkhanov holds 59.4% of the Bank’s shares
and Mikail Gutseriev – about 39.4%.
Currently the Bank considers its participation in
recapitalization program implemented by DIA (via
federal loan bonds). B&N Bank’s Board of Directors
approved the preliminary terms and conditions of the
recapitalization program (RUB 8.8bn).
* CAR for 2009 and 2010 is calculated according to Basel I, from 2011 to
2014 - according to Basel II
25
In 2014 B&N Bank demonstrated a fivefold increase in its net profit
Dynamics of the net profit, RUB bn
3.9
•
•
0.75
0.75
2012
2013
0.20
2011
2014
Dynamics and structure of the
operating income, RUB bn
•
•
28.7
16.5
12.1
8.0
5.9
2.1
3.7
3.8
4.3
2011
2012
Net interest income (before LLP)
6.0
•
Net profit of the Bank at 2014 year-end
amounted to RUB 3.9bn (5x increase
compared with 2013 year-end) as a result of
the acquisition.
Interest income of the Group increased by 59%
and amounted to RUB 29.2bn. Net interest
income (before provisions) increased by 101%
and amounted to RUB 12.2bn.
Net non-interest income significantly rose from
RUB 6bn to RUB 16.5bn (+173%) due to
commission income and gains on FOREX
operations.
Profitability ratios demonstrated a substantial
growth: ROAA – 1.2% (0.39% in 2013), ROAE
– 16% (4.91% in 2013).
The Bank managed to decrease CIR to 44%
(87% as at 2013 year-end) which reflects an
increase in the Bank’s operating efficiency in
2014.
12.2
6.1
2013
2014
Net non-interest income
26
B&N Bank maintains a strong liquidity position
Liquidity ratios as of January 1, 2015
Central Bank ratios
Instant liquidity
N2 ≥ 15%
Current liquidity
N3 ≥ 50%
Long-term liquidity N4 ≤ 120%
Liquidity position as of January 1, 2015*,
RUB mln
NOSTRO correspondent accounts
33 557
Cash (the mobilized part)
4 705
Highly liquid securities (Lombard List) and
Interbank loans and reverse REPO
transactions
15 417
Reserve investments into securities of
foreign states (rating АА+)
11 124
TOTAL
64 803
Ratio performance
129%
148%
52%
* Liquidity position is based on the data of RAS Financials
•
•
B&N Bank maintains a high level of the liquid and highly-liquid assets (usually about 15% of the total assets).
Current liquidity reserves remain high. CBR prudential ratios governing liquidity are well above the minimum regulatory
requirements.
27
Appendices
28
Appendix 1: Consolidated statement of comprehensive income for the
year ended December 31, 2014 (IFRS) 1/2
The US dollar amounts representing B&N Bank's financial statement information were converted from Roubles at the exchange rates at the end of each respective period:
56.2584 for 2014 Financials, 32.7292 for 2013 Financials.
December 31,
2014 (RUB)
December 31,
2014 (USD)
December 31,
2013 (RUB)
December 31,
2013 (USD)
Interest income
29,226,405
519,503
18,371,018
561,304
Interest expense
(17,050,078)
(303,067)
(12,314,215)
(376,246)
NET INTEREST INCOME BEFORE
PROVISION/ FOR IMPAIRMENT LOSSES
ON INTEREST BEARING ASSETS
12,176,327
216,436
6,056,803
185,058
Provision for impairment losses on interest
bearing assets
(9,979,369)
(177, 385)
(797,086)
(24,354)
NET INTEREST INCOME
2,196,958
39,051
5,259,717
160,704
Gain on initial recognition of financial
instruments
5,461,104
97,072
_
_
318,215
5,656
821,944
25,113
Net gain on foreign exchange operations
4,454,874
79,186
1,892,989
57,838
Fee and commission income
3,850,608
68,445
2,574,612
78,664
Fee and commission expense
(1,094,036)
(19,447)
(686,227)
(20,967)
Other provisions
(84,123)
(1,495)
25,034
765
Loss from sale of bad debts
(460,532)
(8,186)
_
_
Income from sale of loans
3,350,826
59,561
507,276
15,499
_
_
300,000
9,166
692,552
12,310
597,358
18,252
16,489,488
293,103
6,032,986
184,330
In thousands of RUB/USD
Net gain on financial assets and liabilities at
fair value through profit or loss
Income from sale of loans previously writtenoff
Other income
NET NON-INTEREST INCOME
29
Appendix 1: Consolidated statement of comprehensive income for the
year ended December 31, 2014 (IFRS) 2/2
The US dollar amounts representing B&N Bank's financial statement information were converted from Roubles at the exchange rates at the end of each respective period:
56.2584 for 2014 Financials, 32.7292 for 2013 Financials.
December 31,
2014 (RUB)
December 31,
2014 (USD)
December 31,
2013 (RUB)
December 31,
2013 (USD)
18,686,446
332,154
11,292,703
345,034
(12,682,176)
(225,427)
(10,499,735)
(320,806)
6,004,270
106,727
792,968
24,228
(1,369,640)
(24,346)
(39,356)
(1,202)
4,634,630
82,381
753,612
23,026
Equity holders of the parent
4,873,924
86,635
737,396
22,530
Non-controlling interest
(239,294)
(4,253)
16,216
495
(891,284)
(15,843)
_
_
178,257
3,169
_
_
3,921,603
69,707
753,612
23,026
Equity holders of the parent
4,160,897
73,960
737,396
22,530
Non-controlling interest
(239,294)
(4,253)
16,216
495
In thousands of RUB/USD
OPERATING INCOME
OPERATING EXPENSES
PROFIT BEFORE INCOME TAX EXPENSE
INCOME TAX EXPENSE
NET PROFIT FOR THE YEAR
Attributable to:
OTHER COMPREHENSIVE INCOME FOR
THE YEAR
Other comprehensive income to be
reclassified to profit or loss in subsequent
periods:
- Unrealised losses on investments available
for sale
- Income tax recognized in other
comprehensive income
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR
Attributable to:
30
Appendix 2: Consolidated statement of financial position as at
December 31, 2014 (IFRS) 1/2
The US dollar amounts representing B&N Bank's financial statement information were converted from Roubles at the exchange rates at the end of each respective period:
56.2584 for 2014 Financials, 32.7292 for 2013 Financials.
December 31,
2014 (RUB)
December 31,
2014 (USD)
December 31,
2013 (RUB)
December 31,
2013 (USD)
34,826,028
619,037
18,584,308
567,820
6,127
109
3,446
105
6,134,665
109,044
12,676,619
387,318
Due from banks and other financial
institutions
117,494,041
2,088,471
28,066,172
857,527
Loans to customers
214,176,810
3,807,019
136,264,139
4,163,381
Investments available for sale
24,955,899
443,594
135
4
Investments available for sale, pledged under
repurchase agreements
14,550,257
258,633
_
_
Property and equipment
6,200,278
110,211
4,535,989
138,592
Intangible assets
1,270,290
22,580
348,837
10,658
Investment property
289,117
5,139
12,844,887
392,460
Current income tax assets
462,681
8,224
388,737
11,877
4,442,464
78,965
3,683,146
112,534
424,808,657
7,551,026
217,396,415
6,642,277
In thousands of RUB/USD
ASSETS:
Cash and balances with the Central Bank of
the Russian Federation
Precious metals
Financial assets at fair value through profit or
loss :
Financial assets held for trading
Other assets
TOTAL ASSETS
31
Appendix 2: Consolidated statement of financial position as at
December 31, 2014 (IFRS) 2/2
The US dollar amounts representing B&N Bank's financial statement information were converted from Roubles at the exchange rates at the end of each respective period:
56.2584 for 2014 Financials, 32.7292 for 2013 Financials.
December 31,
2014 (RUB)
December 31,
2014 (USD)
December 31,
2013 (RUB)
December 31,
2013 (USD)
Due to the Central Bank of the Russian
Federation
13,837,821
245,969
2,002,774
61,192
Due to banks and other financial institutions
50,778,170
902,588
1,809,092
55,275
Customer accounts
263,908,410
4,691,005
172,035,143
5,256,320
Debt securities issued
23,480,260
417,365
12,952,887
395,759
Deposits from DIA
25,372,208
450,994
_
_
Subordinated debt
13,988,284
248,643
7,547,441
230,603
Deferred tax liabilities
1,090,779
19,389
_
_
Other liabilities
1,636,867
29,096
2,835,386
86 632
Total liabilities
394,092,799
7,005,048
199,182,723
6,085,780
Share capital
10,885,666
193,494
8,960,275
273,770
Additional capital
15,584,189
277,011
9,250,594
282,640
Investments available for sale fair value
reserve
(713,027)
(12, 674)
_
_
Accumulated profit
4,866,004
86,494
2,823
86
Total equity attributable to owners of the
parent
30,622,832
544,325
18,213,692
556,497
93,026
1,654
_
_
Total equity
30,715,858
545,978
18,213,692
556,497
TOTAL LIABILITIES AND EQUITY
424,808,657
7,551,026
217,396,415
6,642,277
In thousands of RUB /USD
LIABILITIES AND EQUITY
LIABILITIES:
EQUITY
Equity attributable to owners of the parent:
Non-controlling interest
32