LOCKO-Bank announces its consolidated Financial Statements for the 9 months ended 30 September 2017 in accordance with International Financial Reporting Standards (IFRS).

LOCKO-Bank announces its consolidated Financial Statements for the 9 months ended 30 September 2017 in accordance with International Financial Reporting Standards (IFRS).

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

• Net profit reached to RUB 1.65 bn.
• Net interest income amounted to RUB 3.6 bn in 9M 2017, up by 6.46% from the year-ago period.
• Net income from operations with financial instruments at fair value, including financial assets available-for-sale equaled to RUB 0.45 bn compared to RUB 0.52 bn the year before.
• Net interest margin made 6.76% increasing by 1.6 pp compared to the 9M2016. The increase in net interest margin was provided by the change in the structure of the assets and decreasing cost of the liability base.
• Net fee and commission income reached RUB 1.4 bn, up by 34.9% from 9M2016.
• Net provision costs equaled to 0.76 bn.
• Operating expenses grew by 22% and reached RUB 3.8 bn compared to RUB 3.2 bn from the year-ago period. The increase is due to investments in the IT infrastructure.

Review of LOCKO-Bank’s key financial indicators:

• Net loan portfolio grew by 6.3% to RUB 46.34 bn compared to 9M2016.
• Assets slightly decreased by 3.83% and reached RUB 76.57 bn. Reduction of securities portfolio became the key factor for decreasing assets.
• In accordance with the approved Bank’s strategy Retail Net loan portfolio reached RUB 28.98 bn in 9M2017, up by 38.9% from the year-ago period.
• Current accounts and deposits from customers increased by 2.6% in 9M2017 and reached RUB 55,42 bn.
• Shareholders’ Equity increased by 11.97% and amounted to RUB 15,2 bn. Capital growth was due to an increase in retained earnings of more than 21.1% compared to 9M2016.

Key financial ratios, %:

• Return on equity (ROE) amounted to 15.1%, increased by 0.7 percentage points in comparison with 9M2016.
• Return on assets (ROA) performed 2.9% versus 2.2% in 9M2016.
• Operating efficiency (CTI) reached 52.4%, 2.2 percentage points up compared to the same period of 2016.
• Total capital adequacy ratio under Basel Capital Accord amounted to 21%.
• NPL 90+ slightly increased by 0.04% and performed 7.7%.
• LLP coverage ratio increased by 2.6% for the 9M2017 reaching the level of 85.8%.

Operating income increased by 11% compared to 9M2016 and amounted to RUB 5.8 bn.

The share of net fee and commission income was 24.5% compared to 20.1% in 9M2016.

SME loan portfolio decreased and amounted to RUB 11 bn. The share of loans to SME totaled 23.4% from Bank’s total loan portfolio.

Retail loan portfolio amounted to RUB 29 bn performing a 38.2% growth. The growth of the loan portfolio is due to the modernization of business processes and start of federal advertising campaign. At the same time, the bank maintained a conservative approach to credit risk assessment.

The high quality of the loan portfolio is one of the bank's priorities. Based on the results of 9M2017, the share of non-performing loans in the loan portfolio (NPL 90+) increased by only 0.04 percentage points compared to 2016 and amounted to 7.7%.

As for September 30st, 2017 the Bank was represented by 50 branches in 21 economic regions of Russia.

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

«According to the approved strategy, Locko-Bank continues to develop digital technologies in all business areas in 2017. The main reason for the growth of the loan portfolio is the transformation of business processes that provided the transition to a digital model of customer service. We continue to develop innovative solutions that allow customers to receive services remotely, without visiting the bank's branches.

The bank continues to actively develop the retail business, especially in terms of lending activities, while maintaining an adequate level of risk and high profitability».