LOCKO-Bank announces its consolidated Financial Statements for the year ended 31 December 2016 in accordance with International Financial Reporting Standards (IFRS).
Due to the general stabilization of the economy, and despite the continuing stagnation in the real sector, LOCKO-Bank received a net profit of 1 950 million rubles for 2016.
LOCKO-Bank’s key indicators of statement of profit or loss
as of December 31, 2016:
Net interest margin made 5.4% increasing by 0.8 pp compared to 2015. The increase in net interest margin was provided by decreasing cost of the passive base.
Net fee and commission income amounted to 1 454 million rubles, an increase of 36.5% compared to the previous year, while its share in the structure of operating income continued to grow and amounted to 20.4% (7.3 pp more than in 2015). The main drivers of growth were the income from insurance of customers due to the growth of sales of retail loans, as well as income from documentary operations.
Operating income in 2016 reached 7.1 billion rubles. Compared to the previous year, the indicator decreased by 1.0 billion rubles. The main factors are a significant amount of income from operations with financial instruments received in 2015, as well as a declining cost of funding and growth of fee and commission income in 2016.
Net profit amounted to 1 950 million rubles, a decrease of 34% compared to 2015. The greater profit in 2015 was due to a significant result on financial instruments in connection with the volatility of the bond and currency markets in 2015.
Review of LOCKO-Bank’s key financial indicators:
Assets for 2016 amounted to 79.6 billion rubles decreasing by 22.4% due to a decrease in the portfolio of securities.
Retail Net loan portfolio by the end of 2016 reached a volume of RUB 21.0 billion rubles, showing an increase of 30.9% from the beginning of the year. The growth of the loan portfolio is due to the development of the bank's retail business and timely adjusting to the current market interest rates on loan products, as well as general stabilization in the retail lending market.
Current accounts and deposits from customers for the year 2016 reached 54.0 billion rubles, an increase of 1.7% compared with 53.1 billion rubles in 2015.
Shareholders’ Equity at the end of 2016 amounted to 13.55 billion rubles.
Key financial ratios, %:
Return on equity (ROE) for 2016 amounted to 14.4%, decreasing by 9.8 percentage points in comparison with 2015.
Return on assets (ROA) for 2016 amounted to 2.2%, decreasing by 1.1 percentage points in comparison with 2015.
Operating efficiency (CTI) for 2016 was 50.1%, compared with 38.6% in 2015.
Tier 1 capital adequacy ratio under Basel Capital Accord amounted to 19.1% (the minimum value is 8%).
Total capital adequacy ratio under Basel Capital Accord amounted to 19.5% (the minimum value is 12%).
N1 ratio was 12.15% at the end of 2016 (the minimum value is 8%).
NPL 90+ for 2016 amounted to 7.7%, an increase of 0.7 percentage points compared with 1H2016. At the same time, non-performing loans to individuals decreased by 1.6 percentage points, from 8.5% to 6.8%, as compared to 1H2016.
Loan loss reserve coverage increased by 2.1 percentage points compared with 1H2016, reaching a level of 83.2%.
Retail loan loss reserve coverage increased by 21.9 percentage points compared with 1H2016 reaching a level of 92.3%.
As the end of 2016 the Bank was represented by 50 outlets in 21 economic regions of Russia.
Stanislav Boguslavskiy, Chairman of the Board of Directors:
«2016 demonstrated a general stabilization of the economy, which in general had a positive impact on the banking sector. However, the continuing stagnation in the real sector is a deterrent to the resumption of the rapid growth of the banking business in its classical model.
It became obvious to us that the rapid growth of the company is possible by changing the format of the business. In this regard, last year LOCKO-Bank adopted an updated strategy, and started a process of deep transformation of business processes which will ensure the bank's transition to a digital model focused on providing remote services to clients. Also, as a part of the strategy, LOCKO-Bank has adopted an investment plan aimed at the development of IT infrastructure. The ultimate goal is to modernize the bank in the medium term in the format of an IT company, to form a range of products available through digital channels. I believe that the new business model will be able to ensure the dynamic growth of the bank's financial indicators and increase the competitiveness of our products in the financial services market».