Upgrade Now

Credit Bank of Moscow posts bumper 2018 profits

By Alexander Bueso

Date: Tuesday 12 Mar 2019

Credit Bank of Moscow posts bumper 2018 profits

(Sharecast News) - Credit Bank of Moscow posted a bumper profit for 2018, on the back of a sharp reduction in its non-performing loans.
For the year ending on 31 December, CBoM, one of Russia's top-three private lenders, reported a 31.5% rise in profit after tax to reach RUB27.2bn (£307.3m) as customer deposits jumped by 35.1% to RUB1.3trn (£1.02bn).

Significantly, the lender continued to make progress in lowering its non-performing loans, which as a proportion of the total loan book stood at 1.6% at the end of the reporting period, versus 2.4% in 2017.

That was thanks to the repayment of several large "problem" loans, which were impaired but not overdue, CBoM said in a statement.

Due in large part to those loan settlements, CBoM's gross loan portfolio shrank by 9.6% to RUB740.1bn (£580.2bn), although in terms of quarterly rates of change it grew by 5.2% over the last three months of the year.

CBoM's net interest margin did slip to 2.6%, but net interest income after provisions soared by 73.1% to RUB46.2bn (£36.22bn) on the back of the improved quality of its loans.

In parallel, its retail portfolio grew by 10.1% to RUB96.6bn (£75.74bn), driven by a 14.2% jump in unsecured loans, but at 86.9% of the gross loan portfolio, it was the corporate sector which continued to account for the bulk of its lending activity.

Meanwhile, its net loans-to-deposit ratio fell to 55.7%, with management attributing that to "the Bank's conservative approach to lending and partly to the accelerated deposit base growth."

Another closely-watched metric, its cost-to-income ratio, printed at 29.8%, while it Cost-of-Risk stood at 1.0%, down from 2.5% at the end of the previous year.

The lender also boosted its capital buffers on a Basel III basis by 8.4% to RUB297.4bn (£233.2bn) - mostly as a result of retained income - for a capital adequacy ratio of 21.9%, alongside a Tier 1 capital ratio of 14.1%.

To take note of, in February 2018, CBoM issued $500m-worth of senior Eurobonds with a coupon of 5.55%, followed by a debut €500m sale of senior Eurobonds at 5.15% in February 2019.

More recently, on 5 March, Forbes ranked CBoM as the top Russian lender in its first list ever of the World's Best banks.

Included in the rankings were financial institutions from 23 countries, mostly belonging to the Organisation for Economic Cooperation and Development, together with the largest emerging economies, such as Brazil and China.

As of 1543 GMT, shares of Credit Bank of Moscow were 0.25% higher at RUB5.92, taking their gain over the preceding year to 22.9%.


Email this article to a friend

or share it with one of these popular networks:

Top of Page