04.04.17. JSCB “NOVIKOMBANK” notes the growth of the key indicators in accordance with RAS for 2016
JSCB “NOVIKOMBANK” has summed up its work for 2016 in accordance with the Russian Accounting Standards (RAS). Experts underline that effective actions taken by JSCB “NOVIKOMBANK”’s management team have determined the positive dynamics of the profit indicator for interim reporting dates during the reporting period. As a result of the fourth quarter of the past year which was a turning point for the Bank, the net financial result of its performance amounted to the positive value of 3.5 billion rubles.
"In 2016, we did a serious work to update the key areas related to strategy of JSCB “NOVIKOMBANK”. In particular, a revision of the main internal banking procedures and assessment of the condition of the Bank's assets was carried out, and an analysis of the client base was carried out to increase the focus of the business on the target segment. As a result, cooperation with clients which can’t fully match the current policy of the Bank and tougher rules for making credit decisions was terminated. These procedures significantly improved the quality of the credit portfolio and became an impulse for expanding of interaction with key real sector enterprises. Thus, we confirm the status of the core Bank of Russian industry and ability to provide financial support to our client’s projects at the highest level" - said Elena Georgieva, Chairman of the Management Board of JSCB “NOVIKOMBANK”.
Toughening of the rules for making lending decisions to non-core customers formed the dynamics of the Bank's credit portfolio which decreased by 20% to 151.3 billion rubles by the end of the year. This indicator significantly affected the decrease in the total value of the Bank's assets by 26% to 202.2 billion rubles. The dynamics of the credit portfolio determined the size of the gross volume of interest income which decreased by 24% compared to 2015 and amounted to 18.4 billion rubles.
Optimization of the structure of liabilities also brought significant results. The decrease in interest expenses by 35% significantly outpaced the decline in income generated by the credit portfolio, which completely eliminated the influence of the factor of decreasing of credit portfolio and ensured net interest income at 2015’s level (7.7 billion rubles). Thus, in 2016 JSCB “NOVIKOMBANK” ensured a significant increase in business efficiency.
Positive dynamics of the Bank's financial state is confirmed by the values of liquidity standards, including the instant liquidity ratio Í2 (30.6%, the minimum indicator value is 15%) and the current liquidity ratio Í3 (89.6%, the minimum indicator value is 50%). Cash balances on the accounts with the Bank of Russia showed an increase of 6% and amounted 13.2 billion rubles at the reporting date according to the results of 2016. The positive state of the Bank's liquidity is also reflected in the decrease of interbank market dependence: since the beginning of the year the volume of funds attracted from the credit institutions declined by 4.5 times and by the end of the year it amounted 3.1 billion rubles.
The volume of the Bank's own funds increased by 64% and exceeded 26.2 billion rubles. Measures to increase the Bank's capitalization ensured positive dynamics of capital adequacy indicators. The indicator of the capital adequacy ratio H1.2. increased from 6.7% to 11.5%. The indicator of the adequacy ratio of own funds H1.0 remains at a high level of 16.0% and significantly exceeds the minimum value of 8.0%. Strong growth of these indicators was provided by the measures implemented with the active assistance of Rostec State Corporation. It included as an additional issue of shares which provided a total growth of JSCB “NOVIKOMBANK” authorized capital and share premium by 2.5 times amounting to 14.4 billion rubles, so providing of financial support of 12.8 billion rubles by its shareholder. Currently, JSCB “NOVIKOMBANK” is working on placement of another issue of shares amounting 6 billion rubles.