LOCKO-BANK announced its financial results for the first half of 2017 according to IFRS: Profit amounted to RUB 1.09 billion

LOCKO-BANK announced its consolidated financial statements for the first half of 2017 according to IFRS with the KPMG Independent Auditors’ Report.

LOCKO-Bank’s key indicators of statement of profit or loss as of June 30, 2017:

• Net profit amounted to RUB 1,088 bn.
• Net interest income performed 7% growth for the first half of 2017 compared to the same period of 2016 and reached RUB 2,3 bn.
• Net fee and commission income grew by 39.3% for the first half of 2017 compared to the same period of 2016 and reached RUB 0,9 bn.
• Net income from operations with financial instruments at fair value, including financial assets, available-for-sale equaled to RUB 0,43 bn compared to RUB 0,45 bn the year before.
• Net interest margin made 6.51% increasing by 1.8 pp compared to the first half of 2016. The increase in net interest margin was provided by decreasing cost of the passive base.
• Operating expenses grew by 24% and reached RUB 2.6 bn compared to RUB 2.09 bn in the same period of 2016.

Review of LOCKO-Bank’s key financial indicators:

• Net loan portfolio grew by 5.6% to RUB 46,01 bn compared to the first half of 2016.
• Assets slightly decreased by 2.58% during the first half of 2017 and reached RUB 77.57 bn. Reduction of securities portfolio became the key factors for decreasing assets.
• Retail Net loan portfolio increased by 21.82% for the first half of 2017 and amounted to RUB 25.55 bn.
• SME Net loan portfolio decreased by 12.2% for the first half of 2017 and amounted to RUB 12.31 bn.
• Current accounts and deposits from customers increased by 3.5% for the first half of 2017 and reached RUB 55,91 bn.
• Shareholders’ Equity increased by 14.8% and amounted to RUB 15,6 bn. Capital growth was due to an increase in retained earnings of more than 21.7% compared to 2016, as well as the sale of shares redeemed earlier to new shareholders.

Key financial ratios, %:

• Return on equity (ROE) amounted to 15.1%, increased by 0.7 percentage points in comparison with 2016.
• Return on assets (ROA) performed 2.8% versus 2.2% in 2016.
• Operating efficiency (CTI) reached 52.5%, 2.4 percentage points up compared to the same period of 2016.
• Total capital adequacy ratio under Basel Capital Accord amounted to 20%
• NPL 90+ slightly increased by 0.2% and performed 7.9%.
• LLP coverage ratio decreased by 2.2% for the first half of 2017 reaching the level of 81%.

Operating income increased by 14% compared to the first half of 2016 and amounted to RUB 3.9 bn. The share of net fee and commission income was 23.1% compared to 19.3% in the first half of 2016.

Retail loan portfolio amounted to RUB 25,6 bn performing a 21.8% growth. The growth of the loan portfolio is due to the modernization of business processes and start of an advertising campaign. At the same time, the bank maintained a conservative approach to credit risk assessment .

SME loan portfolio slightly decreased by 12% and amounted to RUB 12.3 bn. The share of loans to SME totaled 26.8% from Bank’s total loan portfolio.

The high quality of the loan portfolio is one of the bank's priorities. Based on the results of the first half of 2017, the share of non-performing loans in the loan portfolio (NPL 90+) increased by 0.2 percentage points compared to 2016 and amounted to 7.9%.

Current accounts and deposits from customers grew by 3.5% to RUB 55,9 bn and became 90.2% of total liabilities

As for June 30st, 2017 the Bank was represented by 54 outlets in 21 economic regions of Russia.

Stanislav Boguslavsky, Chairman of the Board of Directors, commented:

«In a stagnant economy, Locko-Bank continues to develop its business, focusing on modernization of business processes and development of technologies. This year, the Board of Directors of Locko-Bank approved the IT-strategy, according to which digital technologies have become the number one priority for all business areas. The final goal is the modernization of the bank in the format of the IT-company and the formation of a wide range of products available in digital channels.

Also, the bank has been consistently profitable for many years, including the most difficult crisis periods. At the same time, we manage to keep the interest margin at a high level, and increase the share of commission income in the structure of the bank's revenues. A conservative approach to risk assessment allows us to maintain a consistently low level of NPL 90+ while maintaining the quality of the loan portfolio».