Home Credit and Finance Bank: IFRS results for the six month period ended 30 June 2009

The net profit of RUB 920 million demonstrates HCFB ability to manage business efficiently under current market environment

Moscow, 16th September, 2009: 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 six month period ended 30 June 2009 in accordance with International Financial and Reporting Standards (IFRS).

“We are glad to announce the results of HCFB performance over the six month period: the net profit of RUB 920 million demonstrates Bank ability to manage business efficiently even under uncertain market environment and typically low season for POS-segment. We completed our business optimisation programme and will focus further on continuing and profitable growth with the target to increase our market share in a retail segment. Risk-cost reduction will remain one of the top-priorities for the bank for 2009, as well as effective cost-base optimisation. Our strong capital and liquidity position supported by the parent company PPF Group provides us and our partners with more comfort and enable the Bank to manage our assets and liabilities in a prudent manner.”

Ivan Svitek, HCFB Chief Executive Officer


  • Net profit of RUB 920 million as of 30 June 2009 (6M 2008: net profit RUB 1,294 million, decrease of 29%)
  • The gross loan book decreased by 13.3% from RUB 82,014 million for YE2008 to RUB 71,104 million as of 6M 2009
  • Net interest income for the six month period of 2009 increased by over 2% up to RUB 9,411 million, compared to the net interest inc for the corresponding period of 2008 (RUB 9,210 million)
  • HCFB demonstrated strong business performance over the period which enabled the Bank to strengthen its leading position in the POS market in Russia, with share of 26%. HCFB also maintains a strong presence in the credit card market with a market share of 10% and with over 9.7 million credit cards issued
  • HCFB has established relationships with 16.7 million customers as of 30 June 2009 creating one of the largest customer databases in Russia
  • A key advantage for HCFB is its well developed network with 83 representative offices and 172 branches and over 29,000 points-of-sale at retailers across 80 regions of Russia
  • HCFB maintains a well balanced and highly liquid position to effectively manage its liabilities with a net liquidity position of over RUB 17.7 billion within 1 year
  • Strong liquidity cushion is also supported by EUR 500 million standby liquidity facility from the PPF Group
  • The Bank maintains very strong capitalisation position with a risk weighted CAR of 30.3%
  • In June 2009 International rating agency Standard and Poor’s confirmed current Bank’s ratings at B+/B with Negative outlook


The overall macroeconomic situation negatively resulted on the consumer market development in Russia. The markets trends remained the same: over the six month period of 2009 the consumer loan market decreased by 8% compared with YE2008 from RUB 4,017 billion down to RUB 3,698 billion. The POS segment decreased by 15% down to RUB 102 billion as of 6M 2009 compared with YE2008, the credit card market demonstrated a 1% decrease to RUB 224 billion, and 12% decrease for cash loan market down to RUB 1,545 billion. Despite the current market conditions and continuing decrease of consumer demand, HCFB demonstrated strong and profitable performance over the reporting period and continues to maintain a leading position in core segments.

HCFB is continuing to progress in its transformation into retail bank. Over the reported period the deposit base increased by over 200% from RUB 810 million as of YE2008 up to RUB 2,610 million demonstrating high growth dynamics on a monthly basis. In accordance with HCFB strategy the Bank modified its deposit offering by introducing deposits in foreign currency and fix term deposits, as well as debit cards.

Well developed and diversified network is one of the key advantages of HCFB. As of 30 June 2009 the network comprised of 172 banking offices, over 29,000 points-of-sale at retailers, 83 representative offices covering 1,200 cities in 80 regions of Russian Federation. In order to strengthen its retail banking platform HCFB is continuing to expand its ATM network which now comprised of 42 ATM in 9 cities with the plans to extend it further to over 200 ATMs across the country.

As of 30 June 2009 the gross loan portfolio decreased by 13.3% to RUB 71.1 billion compared with the YE2008 as a result of the overall market tendencies and HCFB continuing focus on stricter underwriting. The POS portfolio decreased by 21% compared with YE2008 results to RUB 26.3 billion as at 30 June 2009. The credit card portfolio exceeded RUB 21.3 billion, representing a decrease of 10% compared with YE2008 results, and the cash loan portfolio amounted to RUB 12.7 billion, showing a decrease of 8% in comparison to the end of 2008 results. HCFB’s loan portfolio remains well diversified and comprises 37% in POS loans, 30% in credits cards, 18% in cash loans and 15% in mortgages and car loans as of 30 June 2009.

Over the reporting period HCFB strengthen its leading position in the POS segment which is considered as the key segment of business development as it provides more opportunities for HCFB as a well-known and experienced player. HCFB maintained the leading position in the POS segment with the market share of 26% and it is the second largest player in the credit card market with a market share of 10 % as of 30 June 2009, according to HCFB estimates.


The Bank continued to generate profit despite the challenging market conditions. Net profit for the six month period ended 30 June 2009 amounted to RUB 920 million compared to RUB 1,294 million for same period in 2008; this goes in line with HCFB expectations and demonstrates Bank’s effective product offering management and conservative provisioning policy approach.

As a result of business optimisation programme and adjustments made in product line-up, the net interest income for the six month period ended 30 June 2009 increased by over 2% to RUB 9,411 million, compared to RUB 9,210 million for the prior year period, apart from overall portfolio decrease. Net interest margin remains relatively high enough at a level of over 19% to absorb risk fluctuation given current market environment and continue profitable growth.

The cost/income ratio decreased significantly – from 46.5% as of YE2008 to 35.9% as of 6M 2009 as a result of business optimisation measures timely introduced by the Bank as a response to unfavourable market conditions.

As effective risk-management and risk-cost reduction remain one of the top priorities for the Bank, HCFB has focused on the strengthening its underwriting, fraud prevention and collection procedures by additional adjustments into scoring system and enhanced and more intensive collections methods. This enabled the Bank to maintain the quality of the overall portfolio and newly generated (post-crisis) portfolio at a stable level and in line with HCFB expectations.

Taking into consideration the prudent steps undertaken by the Bank and overall portfolio decrease (by 13%), the level of NPLs as a percentage of the gross loan book was 15.5% as at 30 June 2009 taking into account the natural ageing of the loan book. At the same time the NPLs are sufficiently covered by provisions at a level of 101%.
The risk cost indicator improved comparing with 3M2009 results down to 16% (17.8% as of 3M2009) which was driven by the positive results achieved thanks to enhanced collection. While HCFB sees positive trends of new generated portfolio behaviour the Bank increased provisions over the performing loans to 5.6% (from 4.1% as of YE2008) due to unstable economic environment and HCFB conservative approach toward provisioning.
The NPLs and Risk-cost indicators as of 30 June 2009 are in line with HCFB expectations and demonstrate Bank’s ability to mitigate the increasing risks which are also sufficiently compensated by high margin.

During the reporting period, the Bank efficiently managed its refinancing schedule. The surplus of liquidity allowed the Bank not only to refinance its obligations due 2009 and optimise the liability side but to continue business development.

HCFB maintains a well balanced and highly liquid position with positive cumulative resources for the next twelve months of over RUB 17.7 billion. During the last three months ended 30 June 2009 the Bank repaid Credit Card securitisation of RUB 8.2 billion in April, EUR 106.5 million syndicated loan facility in June, purchased back USD 250 million of Eurobonds issue outstanding. In June 2009 HCFB also placed its 6th domestic bond issue of RUB 5 billion. The Bank has developed a manageable refinancing agenda for 2009 which is also supported by the bank’s parent company – PPF Group

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 at 30 June 2009 of 30.3%, in line with management target levels and a Tier 1 capital position of 29.0%.

In May 2009, HCFB announced that PPF Group extended a standby liquidity facility in the amount of EUR 500 million which has, to date, not been utilised 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 June 2009 International rating agency Standard and Poor’s confirmed current ratings for HCFB at a level of B+/Negative/B.


(‘000 000 RUB) 6M008 6M009 Y-o-Y change
Total Assets 89,300 93,462 4,7%
Net interest Income 9,210 9,411 2,2%
Gross Loan Book 76,186 71,104 (6,7%)
Net Profit 1,294 920 (28,9%)
Total Equity 16,233 22,541 38,9%



Alena Zheltova
Head of Corporate Finance and Investor
Relations, HCFB
Tel: (+7) 495 785 82 25 (4431)


Milan Tománek
Head of PPF Group Communications
tel: +420 224 559 573


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 26% market share in the point-of-sale market and almost an 10% market share of the credit card market as at 30 June 2009.

HCFB offers its clients a wide range of credit products with variable credit terms. HCFB’s products are distributed through over 29,000 POS outlets across over 1,200 cities throughout Russia. The Bank’s regional network comprises 83 representative offices, 172 banking offices and 6 branches across the Russian Federation as at 30 June 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 part of the PPF Group, which is a leading international financial group. Established in 1991, PPF Group now operates in consumer finance and retail banking. Through its stake in Generali PPF Holding the Group participates in the insurance market and asset management services. PPF Group also actively seeks investment opportunities and undertakes strategic investments in developing markets of the CEE and CIS. During its 18 years in business, PPF Group has become an important international financial investor, managing assets of EUR 10.7 billion as of 31 December 2008.