Public Joint Stock Company “State Savings Bank of Ukraine” (Oschadbank) hereby presents to you the recently published Interim Condensed Consolidated Financial Information for the six months 2013, audited by Deloitte & Touche. Operating in a volatile economic environment, Oschadbank continues to demonstrate steady growth and sound financial results. Please see below the major financial highlights in brief.
Net interest income before provisions rose by 4.9% YoY and reached UAH 2.7 bn as of June 30, 2013, bringing annualized net interest margin to 5.9% (6.3% as of June 30, 2012). Net non-interest income, mainly driven by proceeds from payment cards, off-balance, settlement and cash operations, totalled UAH 0.6 bn, up by 24.9% YoY.
Operating expenses increased by 12.9% YoY to UAH 1.6 bn as of June 30, 2013, driven by staff and administrative costs, reflecting inter alia Bank’s business expansion, continued IT and technology development. This resulted in the cost-to-income ratio of 48.6% vs. 46.6% for the similar period of 2012.
A reported profit before tax for the six months 2013 reached UAH 637.6 mln vs. UAH 680.0 mln a year before. 1H2013’s financial result was moderated by provisioning charge growth, confirming Oschadbank’s adherence to its conservative provisioning policy. The annualized return on average assets (ROAA) reached 1.11%, compared to 1.66% in 1H2012.
On the balance sheet side, Oschadbank’s assets grew by 7.5% YTD to UAH 89.7 bn, bringing the bank to the second place by assets among the Ukrainian banks as of June 30, 2013.
Gross loan book inched by 0.8% YTD and totalled UAH 61.9 bn in 1H2013. The management, however, expects better growth of the loan portfolio in 2H2013, considering the customer pipeline. The Bank’s exposure to Naftogaz equalled to 32.8% of the bank’s gross loan book, down from 33.1% in 2012, 34.5% in 2011, 51.0% in 2010 and 58.1% in 2009.
NPLs remained flat at 7.3% and were covered by loan loss provisions for a comfortable 244%. LLPs were up by 9.8% YTD and equalled UAH 11.0 bn or 17.8% of total loans as of June 30, 2013 vs. 16.3% at the end of 2012. NPLs level and the coverage ratio by provisions remain one of the best among Ukrainian banks.
Outperforming the market, customer accounts grew by 11.1% during the first six months 2013 and amounted to UAH 43.2 bn. Gross loans-to-deposits ratio adjusted for the NBU refinancing amounted to 109.6 % in 1H2013 (vs. 121.0% in 2012).Total equity increased by 1.0% YTD to UAH 17.9 bn for the account of retained earnings. Capitalization remains strong with capital adequacy ratio of 26.6% and Tier 1 ratio of 24.1% (27.9% and 25.1% as at year end 2012, respectively). Additionally, a new UAH 1.4 bn capital injection was approved by the government in July 2013 and is expected to be finalized by the end of 2013.