Expobank CZ www.expobank.cz Expobank JSC BELGRAD www.expobank.rs AS Expobank www.expobank.eu

News and events

2 june

Expobank reports good IFRS First Quarter 2020 results

Expobank reported 736 million rubles of net profit, almost equal to the same quarter last year in spite of significant increase in prudential provisions due to the early effect of the health crisis.

Andrei Shalimov, CFO of Expobank, commented, “All things considered the quarter results were very good. We have continued to see growth in operating income in spite of no increase in loans and a large increase in prudential reserves for possible losses. We have been careful with our credit exposures, with limited new lending to selected customers and reductions in overall risk in car loans and our express guarantees as we tightened our credit assessments. Careful management of the foreign currency exposure of the bank and our securities portfolio provided a slight positive effect. We have fully integrated our acquisition last year of Kurskprombank which is now our Black Earth branch. The integration was complete before the end of March. The full legal and technical integration raised our regulatory capital to a comfortable level of 14.2% against a required minimum of 10.5%. IFRS capital exceeded 20 billion rubles for the first time.

“We are taking the utmost care in the midst of the health crisis, both with the majority of our staff working from home and providing protection for our customers. I addition we are very pleased to see a number of moderate size banks have joined our “#helpingtogether” (#ПоможемВместе) initiative to provide support in the form of equipment to hospitals and protective gear to health workers.

“Looking forward, we expect the disruption in business due to the health crisis to have a significant effect on many of our corporate customers as they may have closed temporarily. We are working with most of them to mitigate the effect to the maximum extent possible. It is too early to quantify the impact on our credit losses and income, but we are confident that our capital and liquidity are sufficient to meet any potential effect.”

Total assets reached 101 billion rubles in 1Q’20, a slight increase of 3% from the beginning of the year. The proportion of liquid assets stayed at the level of year-end 2019 and was 36% as of 1 April 2020. Loans to customers were almost unchanged at 61 billion rubles.

On the liability side over 70% of deposit and account funding comes from retail clients. Customer deposits and current accounts amounted 75 billion rubles as of 1 April 2020, up slightly from year-end.

Equity grew by 4% from the beginning of the year to a record 20.4 billion rubles. The Bank’s capital adequacy ratio (N1.0) was 14.2% again the minimum CBR requirement of 10.5%.

Net interest income for the 1Q’20 grew by 38% from the same period of the last year to 1,775 million rubles. We increased expected credit loss allowance to 273 million rubles, up more than 4 times from the same period last year. Fees and commissions increased more than two times to 282 million rubles. Operating income was 1,797 million rubles in 1Q 2020, an increase of 15% from the same period of the last year. Operating expenses grew by 28% to 882 million rubles, cost to income ratio rose to 49% from 43%.

Recently two rating agencies confirmed our ratings: in April 2020 Fitch confirmed our rating at BB-, but changed the outlook to negative for us and a number of mid-size Russian banks; in May 2020 Expert RA affirmed Expobank’s rating at ruA- with a stable outlook.

Key financial indicators:

RUB mln 1Q'20 1Q'19 %
Net profit 736 766 (4%)
RoE 14,8% 21,1% -
Equity 20 397 15 069 35%

RUB mln 1Q'20 2019 %
Total Assets 100 707 98 060 3%
Loans to corporate customers 31 449 33 792 (7%)
Loans to retail customers 30 496 27 825 10%
Liquid assets 36% 35% -
Guarantees 17 856 25 764 (44%)
Total Liabilities 80 310 78 534 2%
Retail customer accounts and deposits 53 603 52 689 2%
Corporate customer accounts and deposits 21 307 20 389 5%
Equity 20 397 19 526 4%

RUB mln 1Q'20 1Q'19 %
P&L
Net interest income 1 775 1 284 38%
Net interest margin 9,2% 7,5% -
Increase in provisions 273 54 404%
Net fee & commission income 282 121 132%
Trading & other income 14 210 -
Total operating income 1 797 1 561 15%
Operating expenses 882 687 28%
Cost to Income Ratio 49% 43% -
Profit before tax 901 942 (4%)
Profit after tax 736 766 (4%)
Total comprehensive income 871 846 3%

01.04.2020 01.01.2020
Total capital adequacy (N1.0) 14,2% 11,8%
Group capital adequacy (N1.2) 12,9% 11,0%