Home Credit & Finance Bank Q1 2007 IFRS results: HCFB reports profit increase of 63.2% to RUR 204 million
Moscow, 06/07/2007
Home Credit & Finance Bank ("HCFB"), 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 three months ended 31st March 2007 in accordance with International Financial and Reporting Standards (IFRS).Highlights
- Net profit for the period of RUR 204 million (Q1 2006: RUR 125 million) - an increase of 63.2%
- Operating income increased 62.5% in the period to RUR 3,158 million (Q1 2006: RUR 1,943 million)
- Increase in the Bank's revolving credit activities with a 168% uplift in the value of credit loans granted, compared to Q1 2006, maintaining HCFB's position as the second largest provider of credit cards in Russia with 9.5% market share
- Revolving credits and cash loans accounted for approximately 38% and over 6% respectively of the Bank's loan portfolio in the first quarter
- The HCFB branch network covers 77 regions across the Russian Federation serviced from 82 representative offices. 24 new loan offices were opened in the first quarter of 2007 and the number of employees rose to 10,191 from 4,974 in the prior year period
- HCFB's client base comprises 12.2 million customers - an increase of 43.5% over the prior year period
- Maintenance of strong capitalisation with risk weighted CAR of 22.3% (YE 2006: 23.7%)
- On 4th May, 2007 Standard & Poors raised its long- and short-term credit ratings on HCFB to B+/B reflecting the on-going support of HCFB's parent, the PPF Group N.V.
- Continuing improvement in net interest income of RUR 2,837 million (Q1 2006: RUR 1,908 million) attributed to the growth in the revolving credit andcash loan portfolios
HCFB's net profit increased by 63.2%, compared to the prior year period, up from RUR 125 million to RUR 204 million. The result was driven by an increase of 49% in the Bank's net interest income from RUR 1,908 billion to RUR 2,837 billion. The growth in net interest income is attributable to the significant increase in the volume of revolving credit card loans where the cumulative value of loans granted totalled RUR 5,861 billion, an increase of over 168% from the prior period last year. HCFB has maintained its ranking as the second largest provider of credit cards by market share with a share of 9.5%.
The cumulative value of cash loans granted increased from RUR 40 million in the prior year period to RUR 1,159 billion, whereas the cumulative value of POS loans granted decreased by 10% in the same period. The decrease resulted from the stabilising of the POS loan market in Russia and HCFB's continued focus on growing its credit card and cash loan portfolio. HCFB's market share in the point of sales market remained stable at 22% and the bank continues to maintain its position as one of the leading providers of consumer banking in the Russian market servicing a customer base of 12.2 million. HCFB's gross loan book has developed in line with the bank's stated strategy of growing the credit card and cash loan business. The overall gross loan book grew from RUR 36,723 billion as at year end to RUR 40,285 billion, an increase of 10%. Credit cards accounted for 38% of the gross loan book, up from 32% at year end and cash loans accounted for over 6% of the book, up from 5% at year end.
For the first time, residential mortgages were offered by HCFB and mortgage advances accounted for RUR 343 million in the first quarter of the year. HCFB considers the mortgage market to be an important area for its loan portfolio and business diversification and in April 2007, the Bank opened its second mortgage centre in St. Petersburg. The car loans market also represents a key area for the Bank - the pilot project was launched in March this year.
HCFB continued to expand its regional presence by developing its own loan office distribution network. During the period HCFB opened 24 new loan offices across Russia with the total number of loan offices exceeding 42 branches as of Q1 2007.
As at the end of Q1 2007, Home Credit & Finance Bank had a risk-weighted capital adequacy ratio of 22.3%; and a Tier 1 capital position of 20.4%. In May 2007, Standard & Poors reaffirmed its decision to raise its long and short-term counterparty credit ratings on HCFB to B+/B from B/C.
Financial Summary
|
31 March 2007 |
31 March 2006 |
y-o-y change |
|
|---|---|---|---|
| Gross Loans Granted | 40,285 | 30,309 | 32.9% |
| Operating Income | 3,158 | 1,943 | 62.5% |
| Net Profit | 204 | 125 | 63.2% |
| Total Assets | 47,356 | 40,861 | 15.9% |
| Total Equity | 10,166 | 8.681 | 17.1% |
Notes to Editors:
Home Credit & Finance Bank
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 22% market share in the point-of-sale market and an 8% market share of the credit card market as of 31 December 2006. HCFB is majority controlled by the international company, the PPF Group.
HCFB offers its clients a wide range of credit products with variable credit terms. As of year 2006, HCFB's products have been distributed through more than 23,000 POS outlets across over 1,100 cities throughout Russia. The bank's regional network comprises 81 representative offices across the Russian Federation as of end of 2006.
Home Credit & Finance Bank is a member of the Home Credit Group. The companies of the Home Credit Group have been operating in the Central and Eastern European consumer loan markets since 1997. The Home Credit Group belongs to the PPF international group of companies which has interests in insurance and consumer finance, and provides complex asset management services. During its 16 years in business, PPF has become a leading international financial investor, managing assets of approximately USD 10.8 billion as at the end of 2006.
For further enquiries, please contact:
Natalya Dokuchaeva
Head of Strategic
Communications, HCFB
Tel: (+7) 495 514 1019 (4930)
>E-mail: press@homecredit.ru
Alena Zheltova
Deputy Head of Corporate
Finance, HCFB
Tel: (+7) 495 514 1017 (4431)
E-mail: alena.zheltova@homecredit.ru
Tomas Cerny
Head of Capital Markets
Home Credit Group
Tel: +420 224 559 174
E-mail: tomas.cerny@homecredit.eu
Important notice:
This press release does not constitute an offer of any securities of HCFB for sale in the United States nor may the securities be offered or sold in the United States absent registration or an exemption from registration as provided in the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder.
Any public offering of the securities to be made in the United States will be made by means of a prospectus that may be obtained from HCFB and that will contain detailed information about HCFB and management, as well as financial statements. However, HCFB does not intend to register any portion of the offering in the United States or to conduct a public offering of any securities in the United States.
This press release is not an invitation nor is it intended to be an inducement to engage in investment activity for the purpose of Section 21 of the Financial Services and Markets Act 2000 of the United Kingdom (the "FSMA"). To the extent that this press release does constitute an inducement to engage in any investment activity included within this press release, it is directed only at (i) persons that which are outside the United Kingdom, (ii) persons who are investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) of the United Kingdom (the "Financial Promotion Order"); or (iii) persons who fall within Articles 49(2)(a) to (d) ("high net worth companies, unincorporated associations etc.") of the Financial Promotion Order; and (iv) any other persons to whom this press release for the purposes of Section 21 of FSMA can otherwise lawfully be made (all such persons together being referred to as "relevant persons"), and must not be acted on or relied upon by persons other than relevant persons. Any invitation or inducement to engage in any investment activity included within the press release is available only to relevant persons and will be engaged in only with relevant persons." Anyone other than a relevant person must not rely on this press release.
This document is not a prospectus and, to the extent that it may constitute an advertisement, does not constitute an offer to sell or the solicitation of an offer to purchase notes or other securities of HCFB. Investors should not subscribe for any securities referred to in this document except on the basis of the information contained in the prospectus relating to the securities.
This document is an advertisement for the purposes of applicable measures implementing Directive 2003/71/EC (such Directive, together with any applicable implementing measures in the relevant home Member State under such Directive, the "Prospectus Directive"). A prospectus prepared pursuant to the Prospectus Directive can be obtained from the offices of ABN AMRO Bank N.V. and BNP Paribas.
This press release does not constitute or form part of any public offer or advertisement of securities in the Russian Federation or in any other jurisdiction, and does not constitute any offer, or any invitation to make offers, to purchase any securities in the Russian Federation or in any other jurisdiction.
Forward-looking statements. Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of HCFB. We caution you that these statements are not guarantees of future performance and future performance involves risks, uncertainties, and assumptions that we cannot predict with certainty. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecasted in the forward-looking statements. We do not intend to update these statements to make them conform with actual results.
06/07/2007
