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Friday, September 21, 2018

BANK ZENIT - RUSSIA: Banking Group ZENIT announced its financial results under IFRS for the six months of 2018

Bank Zenit - Russia issued the following announcement on Aug. 30.

Banking Group ZENIT has published interim condensed consolidated financial statements in accordance with International Financial Reporting Standards for the six months ended June 30, 2018, with the conclusion of an independent auditor based on the results of the review.

Banking Group ZENIT showed a positive financial result for 6 months of 2018 in the amount of 618 million rubles. (6 months of 2017: 645 million rubles). Net operating income for the first half of 2018 increased by 9.6% compared to the same period last year.

The key factor in the positive financial result was the growth of net interest income by 10%, despite the continuing general decline in interest rates on the market (4.5 billion rubles for 6 months in 2018 against 4.1 billion rubles for 6 months in 2017).

As a result of the reduction in the resource base and the increase in the profitability of operations, the Group's net interest margin (NIM) increased from 3.4% in 2017 to 3.8% (in annual terms) in the first half of 2018.

The Group continues to reduce dependence on funding attracted to debt capital markets. The share of funds raised through the issue of debt securities in total liabilities decreased to 5.5% as of June 30, 2018, compared to 7.5% as of December 31, 2017.

The Group continues to take measures to improve the quality of its loan portfolio in 2017, which allows it to maintain its COR reserve at 2017 (1.9% for 6 months in 2018, at 2% for 2017). The coverage of NPL90 + reserves remains at a high level (239%, which significantly exceeds the average market level). The share of third stage loans in accordance with IFRS 9 in the total loan portfolio is at the level of the first quarter of 2018.

The Group significantly increased the volume of liabilities at the expense of customers (by 8 billion rubles, or 4.7% for 6 months in 2018).

Banking Group ZENIT supports high capital adequacy ratios. The general capital adequacy ratio in accordance with the requirements of the Basel Accord was 14.6%, the Tier 1 capital adequacy ratio was 9.7% (at the standard values of 8.0% and 6.0%, respectively).

The return on equity ratio (ROE) in the first half of 2018 was 5.0%, with all key indicators meeting or exceeding the target levels laid down in the three-year development strategy.

Dynamics of credit ratings of Bank ZENIT

In December 2017, the rating agency RAEX (Expert RA) assigned a credit rating to Bank ZENIT at ruA-. The rating is set to "stable" forecast.

February 20, 2018 International agency Moody's Investors Service confirmed the bank's rating of long-term deposits in foreign currency at the level of "Ba3" and changed the outlook on the rating from negative to positive.

In December 2017, the international agency Fitch Ratings affirmed the long-term issuer default rating in foreign currency at "ВВ" level with a stable outlook.

Original source can be found here.

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Bank Zenit - Russia

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