LOCKO-Bank announced its financial results for 1H2016 according to IFRS: net profit amounted to RUB 979 million

LOCKO-BANK announces its consolidated interim condensed Financial Statements for the six-month period ended 30 June 2016 with KPMG’s auditors’ report on review of such statements.

Despite continuing stagnation in real economy and consumption LOCKO-Bank reordered Net profit of RUB 0.979 bn for 1H2016.

LOCKO-Bank’s key indicators of statement of profit or loss for the six-month period ended 30 June 2016:

o   Net profit amounted to RUB 0.979 bn

o   Interest income performed 7.3% growth for 1H2016 compared to 1H2015 and reached RUB 5.79 bn

o   Net fee and commission income grew by 41% compared to 1H2015 and reached RUB 644 mn

o   Net interest margin made 4.7% increasing by 0.2 pp compared to 1H2015 which was boosted by interest income increase.

o   Net gain on financial instruments at fair value through profit or loss along with Net realised gain on available-for-sale financial assets equaled to RUB 443 mn compared to RUB 829 mn in 1H2015.

o   Impairnment losses remains at the same level and amounted to RUB 428 mn.

o   Operating expenses grew by 20.7% and reached RUB 2.27 bn compared to RUB 1.88 bn in 1H2015.

Review of LOCKO-Bank’s key financial indicators:

o   Assets decreased by 15.2% during 1H2016 and reached RUB 87.05 bn. Reduction of securities portfolio and REPO transaction volume became the key factors for decreasing assets.

o   Net loan portfolio slightly decreased by 1.9% and totaled to RUB 44.28 bn compared to RUB 45.13 bn in 1H2015

o   Retail Net loan portfolio increased by 15.4% compared to the same period of 2015 and amounted to RUB 17.22 bn which was the result of Bank’s return to secured consumer lending market.

o   SME Net loan portfolio decreased by 10.4% compared to the same period of 2015 and amounted to RUB 27.07 bn.

o   Current accounts and deposits from customers amounted to RUB 49.84 bn, 7.3% up compared to the same period of 2015.

o   Shareholders’ Equity decreased by 8.0% during 1H2016 and amounted to RUB 12.58 bn which was the result of IFC's exit from the capital of the Bank and dividend payment.

o   Dividend payment in the amount of 25.0% of net profit for 2015 year (more than RUB 2.67 bn under RAS) exceeded RUB 669 mn. Executed dividend payment demonstrated efficiency of shareholders’ investments in equity on the level of 24.0% from the nominal value of 1 share.

Key financial ratios, %:

o   Return on equity (ROE) decreased by 8.3 percentage points compared to 1H2015 and amounted to 14.4%.

o   Return on assets (ROA) performed 2.0% versus 3.1% in 1H2015.

o   Operating efficiency (CTI) reached 53.5%, 11.8 percentage points up compared to the same period of 2015.

o   Tier 1 capital adequacy ratio under Basel Capital Accord amounted to 18.3%.

o   NPL 90+ slightly increased by 0.75 compared to the same period of 2015 and performed 7.03%.

o   LLR coverage ratio amounted to 81.1%.

Interest income for 1H2016 demonstrated 7.3% growth compared to the same period of 2015 and reached RUB 5.79 bn. This was primary due to income growth from securities portfolio.

Operating income decreased by 3.1% compared to 1H2015. Declining of currency exchange fees was compensated by positive trend in Net Interest income (+24.0%) and Net fee and commission income (+41.0%).

Retail loan portfolio amounted to RUB 17,22 bn performing a 15.4% growth compared to the same period of 2015. The growth was a result of change in Bank’s risk assessment, development of new retail loan products and proactive selling of such products.

SME loan portfolio decreased by 10.4% compared to 1H2015 and amounted to RUB 27.07 bn. The share of loans to SME totaled 61.1% from Bank’s total loan portfolio. Declining of SME loan portfolio is balanced by retail loan portfolio growth.

Current accounts and deposits from customers grew by 7.3% compared to 1H2015 (to RUB 49.84 bn) and totaled 66.9% of total liabilities. Current accounts and deposits from individuals demonstrated high growth of 32.3% to RUB 37.51 bn.

As for June 30, 2016 the Bank was represented by 50 outlets in 21 economic regions of Russia.

Victor Davydik, Acting Chairman of the Executive Board:

«The first half of 2016 demonstrates continuing stagnation in real sector and consumption associated with remaining geopolitical risks and fluctuations in energy prices. At the same time signs of stabilization and possible economic growth in the end of current year and next year become more evident. LOCKO-Bank as an active participant of the economic system demonstrates continuing financial effectiveness as well and always improves its business processes and develops innovative approaches in servicing clients. In 2016 Bank again entered the secured consumer lending market, substantially increased the retail loan portfolio without change of NPL levels and also offered innovative services for legal entities – instant remote opening of current accounts, accelerated issuance of bank guarantees on the entire territory of the Russian Federation. All this provided high profitability of the Bank's activities.

It should be noted that on Annual General Meeting of Shareholders held on 30 June 2016 it was approved the payment of dividends in the total amount of more than RUB 669 mln representing 25.0% of net profit for 2015. As a result, efficiency of shareholders’ investments in equity is estimated on the level of 24.0% from the nominal value of 1 share, which demonstrates the quality of the Bank's business development in general.

With the stabilization of economic situation in 2016-2017 we will continue active development of the key business segments offering new services and products to customers, while maintaining a sufficient level of all major standards and positive financial result".