LOCKO-Bank announced its financial results for 9m2016 according to IFRS: net profit amounted to RUB 1 676 million

LOCKO-BANK announces its consolidated interim condensed Financial Statements for the nine-month period ended 30 September 2016.

Despite continuing stagnation in real economy and declining consumption, LOCKO-Bank reсordered net profit of RUB 1 676 mn for the mentioned period.

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

• Net interest income amounted to RUB 3.5 bn, which is 27.2% more than in the same period of last year. Most of the increase is due to growth of retail loan sales, as well as the replacement of borrowings for the new with lower cost.
• Net interest margin made 5.1% increasing by 0.8 pp compared to 9m2015. The increase in net interest margin was provided by day-to-day management of interest-rate risk and replacement of borrowings for the new with lower cost.
• Net fee and commission income increased by 39.6% compared to the same period of last year and amounted to RUB 1 057 mn, while its share in operating income continued to grow and reached 19.9%, an increase of 6 percentage points compared to the same period in 2015. Revenues from customers’ insurance became the main driver of net fee and commission growth due to the growth of retail loan sales as well as income on documentary operations.
• Operating income for 9m2016 reached RUB 5.41 bn. Income is roughly on the same level in comparison with the 9m2015, despite the significant amount of income from transactions with financial instruments in 2015. The main factors of growth are reducing the cost of funding in the aggregate with an increase in net fee and commission income.
• Net profit amounted to RUB 1.68 bn, and decreased by 20% compared to the same period of 2015. The large amount of profit in 2015 was provided by a significant result on financial instruments due to the volatility in bond and currency markets in 2015.

Review of LOCKO-Bank’s key financial indicators:

• Assets for 9m2016 amounted to RUB 82.7 bn, decreasing by 19.5%.
• Net loan portfolio for 9m2016 decreased by RUB 3.7 bn and totaled to RUB 43.98 bn compared with RUB 47.68 bn at the end of 2015.
• Retail Net loan portfolio for 9m2016 reached RUB 19.6 bn demonstrating an increase by 22.3% from the beginning of the year. The growth of the loan portfolio is due to timely adapted interest rates for the loan products to the current market level, as well as the general stabilization in the retail loan market.
• Current accounts and deposits from customers for 9m2016 reached RUB 50.1 bn, 4.3% up compared to RUB 48.01 bn for the same period of 2015.
• Shareholders’ Equity for 9m2016 amounted to RUB 13.27 bn, an increase by 3.1% compared to the same period in 2015.

Key financial ratios, %:

• Return on equity (ROE) for 9m2016 increased by 2.1 percentage points compared to 1H2016 and amounted to 16.5%.
• Return on assets (ROA) for 9m2016 performed 2.4%, an increase of 0.4 percentage points compared to 1H2016.
• Operating efficiency (CTI) for 9m2016 was 50.4%, compared with 53.5% in 1H2016.
• Tier 1 capital adequacy ratio under Basel Capital Accord amounted to 19.0%.
• Total capital adequacy ratio under Basel Capital Accord amounted to 19.5%.
• NPL 90+ for 9m2016 decreased by 0.35 percentage points compared to 1H2016 and performed 6.68%.
• LLR coverage ratio increased by 5.7 percentage points compared to 1H2016 reaching a level of 86.8%.

Net income for 3Q2016 reached RUB 697 mn, which was provided by net interest income as well as net fee and commission income, the growth of which by the end of 3Q2016 compared to the previous quarter was 9.5% and 18.3% respectively.

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

Victor Davydik, Acting Chairman of the Executive Board:

«Nine months of 2016 demonstrate continuing stagnation and a slight decrease in consumption. Nevertheless, by the end of this year, we estimate the chances of a possible beginning of economic growth in 2017 as an above-average. LOCKO-Bank is an active participant of the economic system, demonstrates continuing financial effectiveness, improves its business processes and develops innovative approaches in customer service. In 2016 Bank again became an active participant of the secured consumer lending market, that is characterized by a substantial increase in the retail loan portfolio while reducing the overall level of NPL, which is the result of effective business management. In 2016 LOCKO-Bank 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.

With the stabilization of economic situation in 2016-2017 we will continue an 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».