Home Credit & Finance Bank (“HCFB” or “the Bank”), rated Moody’s Ba3/NP/D-, S&P B+/B, and one of the leading banks specializing in consumer banking in Russia, announces its financial results for the nine month period ended 30 September 2009 in accordance with International Financial and Reporting Standards (IFRS).
“We are delighted with the results we achieved over the reporting period with the solid profitability of RUB 3.1 billion which is above our expectations. The increase in all Profit & Loss lines, significant reduction of risk-costs were the results of business optimization programme we introduced last year. This programme has enabled the Bank to continue investing into retail banking development which is going full speed ahead. We strengthen our position on the consumer finance market having all the capacities and resources to be successful in this segment. The fourth quarter is historically the best season of the year and we are focusing on growing our business.”
Ivan Svitek,
HCFB Chief Executive Officer and
Chairman of the Management Board
Over nine month period of 2009 HCFB made a significant progress in its development as a retail bank. Over the reported period the deposit base increased by 350% from RUB 810 million as of YE2008 up to RUB 3.6 billion demonstrating high growth dynamics on a monthly basis.
As of 30 September 2009 HCFB’s well developed network comprised of 175 banking offices, over 31,000 points-of-sale at retailers, 82 representative offices and 250 ATMs covering 1,200 cities in 80 regions of Russian Federation. HCFB will continue smart network expansion by launching mini-offices project in 2009.
The gross loan portfolio decreased by 16.8% to RUB 68.2 billion compared with the YE2008 reflecting the overall market tendencies and HCFB focus on effective risk-management. HCFB’s loan portfolio remains well diversified and comprises 38% in POS loans, 30% in credits cards, 18% in cash loans and 15% in mortgages and car loans as of 30 September 2009.
HCFB market position remained strong making the Bank #1 leader in POS segment with over 29% market share and it is the second largest player in the credit card market with a market share of almost 9% as of 30 September 2009, according to HCFB estimates.
Net profit for the nine month period ended 30 September 2009 amounted to RUB 3.1 billion with RUB 2.2 billion made during the third quarter of 2009, compared to RUB 2.3 billion for the nine month period of 2008. Over 30% increase in profitability was a result of business optimisation programme introduced by the Bank a year ago.
The net interest income for the nine month period ended 30 September 2009 slightly decreased by 2% to RUB 13.8 billion, compared to RUB 14.1 billion for the prior year period and taking into account the portfolio decline.
Bank is continuing to manage efficiently its cost-base. As a result of timely introduced measures and completion of banking network the cost/income ratio decreased significantly – from 46.5% as of YE2008 down to 34.2% as of 9M 2009. Well developed banking network which is making HCFB one of the largest banks in terms of regional coverage become profitable as of to date.
HCFB made a great progress in effective management of loan portfolio quality: despite overall portfolio decrease of almost 17%, the risk-costs significantly improved from 16.1% as of 6M 2009 to 13.8% as of 9M 2009, while the level of NPLs as a percentage of the gross loan book remained stable at a level of 15.9% as at 30 September 2009 taking into account the natural ageing of the loan book. In absolute numbers the level of NPLs decreased from RUB 11.0 billion down to RUB 10.8 billion.
At the same time the NPLs are sufficiently covered by provisions at a level of 98%, which demonstrate the positive trends in quality of HCFB loan portfolio.
The overall improvements in asset quality were a result of stricter underwriting procedures which enabled the Bank to attract better quality customers, enhanced collections and fraud prevention measures. While HCFB demonstrated positive trends of portfolio behaviour the Bank approach towards provisions for the performing loans has been increased to 5.0% (from 4.1% as of YE2008).
HCFB maintains a well balanced and highly liquid position with RUB 13.7 billion of Cash and Cash equivalents and RUB 13.0 billion of highly liquid bond portfolio. The surplus of liquidity allowed the Bank to refinance its obligations due 2009 and optimise the liability side and to continue to invest into retail business development.
As of 30 September 2009 the Bank purchased back over USD 340 million of Eurobonds outstanding. The Bank has developed a manageable refinancing agenda for 2009-2010 which is also supported by the bank’s parent company – PPF Group.
In May 2009, HCFB announced that PPF Group extended a standby liquidity facility in the amount of EUR 500 million which has not been utilised yet providing HCFB with a further solid liquidity cushion. PPF Group N.V. has repeatedly confirmed that HCFB remains a strategic line of business for the Group and that Russia is a strategically important country for its business interests.
In October-November HCFB successfully completed the transaction by obtaining financing of the total amount of RUB 1.8 billion for 1 year secured by mortgage portfolio receivables and successfully placed its domestic bond issue HCFB-04 of almost RUB 3 billion on the secondary market with over 40% of oversubscription.
The capital position of the Bank, together with the support of its parent PPF Group, resulted in HCFB posting a risk-weighted capital adequacy ratio of 33.9% as at 30 September 2009, in line with management target levels and a Tier 1 capital position of 32.7%.
In June 2009 International rating agency Standard and Poor’s confirmed current ratings for HCFB at a level of B+/Negative/B. Moody’s ratings and outlook for HCFB are at the current levels Ba3/NP/D-, outlook – Negative after meeting with analysts in November 2009.
| (‘000 000 RUB) | 9M2008 | 9M2009 | Y-o-Y change |
| Total Assets | 95,436 | 95,342 | (0,1%) |
| Net Interest Income | 14,099 | 13,804 | (2,1%) |
| Gross Loan Book | 81,899 | 68,229 | (16,7%) |
| Net Profit | 2,344 | 3,097 | 32,7% |
| Total Capital | 18,167 | 25,667 | 41,3% |
Alena Zheltova
Head of Corporate Finance and Investor Relations, HCFB
Tel: (+7) 495 785 82 25 (4431)
E-mail: alena.zheltova@homecredit.ru
Milan Tomanek
Head of PPF Group communications
Tel: +420 224 174 066
E-mail: tomanek@ppf.cz
Sofia Abdrazakova
Strategic communications, HCFB
Tel: (+7) 495 514 1019
E-mail: sofiya.abdrazakova@homecredit.ru
Home Credit & Finance Bank (Moody’s Ba3/NP/D-, S&P B+/B) is one of the leading banks specializing in consumer banking in Russia with a 29% market share in the point-of-sale market and 9% market share of the credit card market as at 30 September 2009.
HCFB offers its clients a wide range of credit products with variable credit terms. HCFB’s products are distributed through over 31,000 POS outlets across over 1,200 cities throughout Russia. The Bank’s regional network comprises 82 representative offices, 175 banking offices and 6 branches across the Russian Federation as at 30 September 2009.
Companies of the Home Credit Group operate in the Central and Eastern European, Central Asian and the Far East consumer finance markets and as at year-end 2007, had granted loans in the combined principal of EUR 3.3 billion. Home Credit Group maintains leading positions in the consumer finance markets of the Czech Republic (Home Credit, since 1997), the Slovak Republic (Home Credit Slovakia, since 1999), the Russian Federation (Home Credit & Finance Bank, since 2002) and the Republic of Kazakhstan (Home Credit Kazakhstan, since December 2005). Home Credit Group also entered the Ukrainian and Belarusian markets in 2006 (CJSC Home Credit Bank, Home Credit Finance and OAO Home Credit Bank respectively) and China (Home Credit Asia, December 2007).
The Home Credit Group is a part of PPF Group, established in 1991, which is a leading international investment group. PPF Group focuses on financial services (banking, insurance and consumer finance), private equity investments, and investments in real property. PPF Group also actively seeks investment opportunities and executes strategic investments in emerging markets of the Central and Eastern Europe and Asia. During its 18 years in business, PPF Group has become an important international financial investor, managing assets of EUR 10.1 billion as of 30 June 2009.
