Locko-Bank announced its financial results for 2015 according to IFRS: Profit amounted to RUB 2.94 billion

LOCKO-BANK announces its consolidated financial statements for 2015 according to IFRS with the KPMG Independent Auditors’ Report.

Despite challenging operating environment LOCKO-Bank recorded Net profit of RUB 2,94 bn. for 2015 and joined the ranks of TOP 30 Russian banks by net profit.

LOCKO-Bank’s profit or loss statement for 2015:

• Net profit increased in 5 times compared to end-2014 and amounted to RUB 2,94 bn
• Operating income performed 49% growth compared to 2014 and reached RUB 8,24 bn
• Net foreign exchange income amounted to RUB 860 mn versus RUB 16 mn in 2014
• 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 1,92 bn versus the loss of RUB 270 mn in the previous year
• Net interest margin made 4.6% declining on 1.3 pp compared to NIM in 2014, which was caused by interest income reduction and substantial growth of assets
• Net fee and commission income grew by 4.5% compared to 2014 and reached RUB 1,07 bn with the share of 12.9% in operating income, which is on 5.5 pp lower the ratio in 2014
• Impairment losses decreased by 30% to RUB 1,4 bn
• Operating expenses reduced by 2.5% and totaled RUB 4,67 bn versus RUB 4,79 bn in 2014

LOCKO-Bank’s financial performance for 2015:

• Assets grew by 29.5% reaching RUB 102,6 bn
• Net loan portfolio lessened less than 1% to RUB 47,68 bn compared to RUB 47,94 bn in 2014
• Net loans to SMEs increased by 1% to RUB 31,66 bn
• Retail Net loan portfolio amounted to RUB 16,02 bn, decreasing by 4% compared to 2014
• Current accounts and deposits from customers increased by 20.5% and reached RUB 53,1 bn versus RUB 44 bn in 2014
• Shareholders’ Equity amounted to RUB 13,68 bn, 28% increase mainly due to retained earnings growth by more than 45%

LOCKO-Bank’s key indicators for 2015:

• Return on equity (ROE) reached 24.2% in annual terms, 18.6 percentage points up compared to 2014
• Return on assets (ROA) performed 3.2% versus 0.7% in 2014
• Operating efficiency (CTI) became 39.7%, 10.6 percentage points down from a year ago
• Total capital adequacy ratio under Basel Capital Accord was 20.3%
• NPL 90+ reduced by 1.2% to 5%
• LLP coverage ratio increased by 10% reaching the level of 122%

Interest income for 2015 amounted to RUB 11,54 bn, 28.2% up compared to 2014, which was mostly due to an increase of interest rates in Russia and Bank’s interest bearing assets growth. At the same time, after dramatically increase of rates up to 17% in December 2014 in Russia, bank’s liabilities were revaluated faster than bank’s assets. As a result interest expenses grew by 70% to RUB 7,57 bn in total, which has a negative impact on net interest income.

Operating income increased by 49.1% compared to 2014. The main components of operating income were net gain on financial instruments at fair value through profit or loss (RUB 1,3 bn), net foreign exchange trading income (RUB 0,86 bn), along with net income from financial assets available for sale (RUB 0,61 bn).

SME loan portfolio recorded positive changes by 2% and totaled RUB 33,57 bn. The share of SME loans in gross loan portfolio maintained the same level of 66%.

Retail loan portfolio amounted to RUB 17,2 bn decreasing by 8% compared to 2014 due to bank’s policy change in risk assessment and demand reduction for lending products.

Maintaining high standards of loan book quality remains a priority for the Bank. Thus, to the end of 2015 the share of non-performing loans in loan portfolio (NPL 90+) dropped by 1.2 percentage points and reached 5.0% in compare with 2014.

Current accounts and deposits from customers grew by more than 20% for 2015 to RUB 53,1 bn and became 60% of total liabilities. Retail deposits performed high growth increasing by 40.4% to RUB 33,81 bn.

As for December 31st, 2015 the Bank was represented by 56 outlets in 21 key economic regions of Russia.

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

2015 was a challenging year for the whole banking industry, however, Bank solidified its capital and liquidity and maintained to perform good profitability results, keeping conservative approach for risk management and cost control. Despite of economic deterioration in Russia, we continued to develop priority business segment – small and medium enterprises, share of which in total bank’s profit comprised more than 37%. During stabilization of economic situation in 2016 we will continue active development of the main business segments, maintaining regulatory ratios at sufficient level and keeping positive financial results.