«Asian-Pacific Bank» (Open joint-stock company) has summed up its 1H 2013 performance under the international financial reporting standards (IFRS).

Key results:

- the Bank’s total assets grew by 23.2% to RUB 113,586 mln compared to the beginning of the year

- net profit for the first half of 2013 increased by 23.1% to RUB 1,664 mln compared to the same period of 2012

- return on average equity (ROAE) was 27.0% as of July 1, 2013, return on average assets (ROAA) was 3.2%, cost-to-income ratio was 39.7%

- current accounts and deposits from customers increased by 20.7% ytd to RUB 78,637 mln

- the Bank’s equity increased by 13.6% ytd and reached RUB 13,102 mln as of the reporting date

Net profit of the Bank grew by 23.2% yoy to RUB 1,664 mln. The main driver of net profit growth is expanding lending operations and following increase of net interest income. Net interest income grew by 35.7% yoy to RUB 3,847 mln. Net fee and commission income more than doubled from 1H 2012 (105.7% growth) and reached RUB 1,413 mln. As before, growth of net fee and commission income was driven by increase in insurance agent commissions by 236.3% yoy to RUB 735 mln and settlement operations fees by 25.0% to RUB 633 mln. Impairment losses for 1H 2013 reached RUB 1,757 mln, which is more than 3 times higher than in 1H 2012, however, positive growth of revenues from the increased loan portfolio and operations generating fee income have surpassed the negative effect of impairment losses.

In 1H 2013 Asian-Pacific Bank kept high levels of efficiency ratios: return on average equity (ROAE) was 27.0% while return on average assets (ROAA) was 3.2% (32.2% and 4.3% as of YE 2012 respectively). Level of the net interest margin was 9.6% (compared to 11.7% as of YE 2012).

Operating income of the Bank grew by 52.5% yoy to RUB 6,275 mln, operating expenses grew by 31.8% to 2,489 mln due to growth of infrastructure development and personnel expenses. Cost-to income ratio dropped to 39.7% from to 45.9% as of 1H 2012 in spite of operating expenses growth.

Gross loan portfolio (before provision for loan impairment) grew by 19.9% to RUB 73,632 mln compared to YE 2012. Portfolio of loans to individuals rose by 17.5% to RUB 50,847 mln (69.1% of the loan portfolio) and portfolio of loans to corporate clients grew by 23.2% to RUB 22,784 mln. Share of NPLs (loans overdue more than 90 days) in the loan portfolio grew to 6.7% as of the reporting date compared to 5.8% as of YE 2012, level of provision coverage of NPLs increased to 84.9% compared to 81.7% as of YE 2012.

Loan to deposit ratio was 88.3% as of the reporting date. Growth of the loan portfolio was supported by increase in accounts and deposits of customers which grew by 20.7% ytd to RUB 78,637 mln. In particular, demand accounts of corporate customers grew by 69.6% ytd to RUB 20,347 mln and term deposits of retail customers grew by 11.9% to RUB 43,943 mln.

Securities portfolio representing 20.7% of the assets, increased by 48.7% ytd to RUB 23,515 mln. Asian-Pacific Bank adheres to conservative investment policy; major part of the portfolio of securities is government and municipal bonds as well as corporate bonds from the Central Bank of Russia’s Lombard List (93% of the bond portfolio).

The Bank’s equity calculated in accordance with the Basel Accord reached RUB 14,062 mln (13.0% ytd growth). Tier 1 capital adequacy ratio was 12.8% and Total capital adequacy ratio was 15.1%.

Ratings

Asian-Pacific Bank’s positions in the Russian and international markets are confirmed by the leading rating agencies:

- long-term foreign and local currency issuer default rating (IDR) B+, short-term foreign currency IDR B by Fitch

- viability rating b+ and support rating 5 by Fitch

- long-term foreign and local currency deposit ratings B2 by Moody`s

- standalone E+ bank financial strength rating (BFSR) and Not Prime short-term bank deposit ratings by Moody`s

- bank credit rating A+ by Expert RA.

Key financials (RUB mln)

1H 2013

2012

2011

Total assets

113,586

92,176

60,530

Gross loans to customers

73,632

61,388

39,659

Customer accounts

78,637

65,143

46,341

Equity

13,102

11,529

8,724

Net interest income

3,847

6,513

4,593

Net profit for the period

1,664

3,261

2,193

Key ratios (%)

1H 2013

2012

2011

Net Interest margin (NIM)

9.6%

11.7%

11.8%

Cost to income ratio (CTI)

39.7%

43.4%

50.5%

ROAA

3.2%

4.3%

4.3%

ROAE

27.0%

32.2%

30.9%

Loans overdue more than 90 days (NPL 90+)

6.7%

5.8%

5.8%

Tier 1 capital adequacy ratio

12.8%

12.8%

14.2%