Home Credit and Finance Bank: IFRS results for the three month period ended 31 March 2009

Timely introduced business-optimisation programme led to positive results in terms of HCFB business and financial performance

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 three month period ended 31 March 2009 in accordance with International Financial and Reporting Standards (IFRS).

“The business optimization programme introduced by the Bank in October 2008 has led to positive results in the first quarter 2009. The platform we have built over the last years enables the Bank to make a great progress in the development of our retail business. HCFB continues to be the leading bank in POS-segment and the second largest provider in credit card market. We are also able to maintain the quality of the portfolio on adequate for business level even under unstable market environment. Strengthening the leading position in POS segment, increasing the market share in retail segment, and maintaining strong risk control will be the priorities for the Bank in 2009.”

Ivan Svitek, HCFB Chief Executive Officer


  • Net profit of RUB 229 million as of 31 March 2009 (3M 2008: net profit RUB 717 million, decrease of 68%)
  • The gross loan book decreased by 5.2% from RUB 82,014 million for YE2008 to RUB 77,779 million as of 3M 2009
  • Net interest income for the three month period of 2009 increased by 6.4% up to RUB 4,874 million, compared to the net interest income for the corresponding period of 2008 (RUB 4,582 million)
  • HCFB demonstrated strong business performance over the period which enabled the Bank to strengthen its market position in the POS market in Russia, with an increased share of over 27%. HCFB also maintains a strong presence in the credit card market with a market share of 10.2% and with over 9.5 million credit cards issued
  • HCFB has established relationships with over 16 million customers as of 31 March 2009 creating one of the largest customer databases in Russia
  • A key advantage for HCFB is its well developed network with 92 representative offices and 176 branches and over 27,000 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 13 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 24.3%. The full support of its ultimate parent company, PPF Group was confirmed by additional capital injections by Home Credit B.V. for a total amount of RUB 2 billion in 2008 and RUB 1 billion in January 2009


The current macroeconomic situation has had an adverse impact on the consumer market in Russia. Over the three month period of 2009 the consumer loan market decreased by 4% compared with YE2008 from RUB 4,017 billion down to RUB 3,872 billion. While the POS segment decreased by 6% down to RUB 111 billion as of 3M 2009 compared with YE2008, the credit card market demonstrated a 1% decrease to RUB 223 billion, and 8% decrease for Cash loan market down to RUB 1,6 billion. Despite the unfavourable market conditions, 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 two-fold from RUB 810 million as of YE2008 up to RUB 1,650 million demonstrating of 25-30% 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.

In 2009 the Bank also introduced New Tariff plans which enable the Bank to provide its customers with bundled products and services to enhance the relations with the clients over the long-term. One of the key advantages of HCFB – well developed network comprising of 176 banking offices, over 27,000 points-of-sale at retailers, 92 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 17 ATM in 5 cities with the plans to extend it further to over 200 ATMs across Russia.

As of 31 March 2009 the gross loan portfolio decreased by 5% compared with the YE2008 as a result of the overall market tendencies and HCFB focus on rigorous market-calibrated underwriting. The POS portfolio decreased by 9% compared with YE2008 results to RUB 30.2 billion as at 31 March 2009. The credit card portfolio exceeded RUB 22.7 billion, representing a decrease of 3.8% compared with YE2008 results, and the cash loan portfolio amounted to RUB 13.0 billion, showing a decrease of 5.4% in comparison to the end of 2008 results. HCFB’s loan portfolio remains well diversified and comprises 39% in POS loans, 29% in credits cards, 17% in cash loans and 15% in mortgages and car loans as of 31 March 2009.

Over the reporting period HCFB strengthen its position as the dominant player in the POS market with a market share of over 27% and the second largest player in the credit card market with a market share of 10.2% as of 31 March 2009, according to HCFB estimates.


The business optimization programme which was timely introduced by the Bank in October 2008 led to positive results in terms of business and financial performance. The Bank continued to generate profit despite the challenging market conditions. Net profit for the three month period ended 31 March 2009 amounted to RUB 229 million compared to RUB 717 million for same period in 2008; this goes in line with HCFB expectations and demonstrates Bank’s conservative provisioning policy approach.

As a result of business optimisation programme and adjustments made in product line, the net interest income for the three month period ended 31 March 2009 increased by over 6% to RUB 4,874 million, compared to RUB 4,582 million for the prior year period. Net interest margin remains relatively high (taking into consideration the increasing cost of funding) at a level of over 21% which allows the bank to mitigate the possible credit risk brought about by the current unfavourable market conditions.

The cost/income ratio decreased significantly – from 46.5% as of YE2008 to 35.2% as of 3M 2009 as a result of cost-optimisation measures undertaken by the Bank in October 2008.

As effective risk-management remains one of the top priorities for the Bank, HCFB has focused on the strengthening its underwriting, fraud prevention and collection procedures. Enhanced risk-management measures introduced under the business optimisation programme enabled the Bank to maintain the quality of the portfolio at a stable level and in line with HCFB expectations.

Taking into consideration the prudent steps undertaken by the bank the level of NPLs, as a percentage of the gross loan book was 12.4% as at 31 March 2009 comparing with 9.5% for YE2008, which HCFB considers as a comfortably acceptable level taking into account the natural ageing of the loan book. At the same the NPLs are sufficiently covered by provisions at a level of 107.5% (YE 2008: 112.7%).
The risk cost indicator increased to 17.8% as of 3M 2009 сompared with 13.6% as of 3M2008. While HCFB sees positive trends of new generated portfolio behaviour the Bank increased provisions over the performing loans due to unstable economic environment and HCFB conservative approach toward provisioning.
The NPLs and Risk-cost indicators as of 31 March 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 2008, the Bank demonstrated its ability to manage its assets and liabilities effectively by obtaining sufficient funding to support further business development. The surplus of liquidity allows 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 13 billion to effectively manage its refinancing schedule. Furthermore, as a part of the liability side optimisation the Bank repaid POS and Credit Card securitisation of EUR 126.5 million and RUB 8.2 billion respectively, purchased back USD 80 million of Eurobonds outstanding and successfully settled several domestic put-options and placed its 6th domestic bond issue of RUB 5 billion on 16th June 2009. As a part of liability side optimisation HCFB also fully repaid EUR 106.5 million syndicated loan facility in June. The Bank has developed a manageable refinancing agenda for 2009 which is also supported by the strong liquidity support from the bank’s parent company.

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 31 March 2009 of 24.3%, in line with management target levels and a Tier 1 capital position of 23.0%.

In June 2008, HCFB announced that it had been provided with a standby liquidity facility from its ultimate parent company PPF Group 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. As a result, PPF Group has also provided HCFB with additional rouble equity injections through HCBV of RUB 2 billion (made in December 2008) and RUB 1 billion in January 2009.


(‘000 000 RUB) 3M008 3M009 Y-o-Y change
Total Assets 82,422 111,430 35.2%
Operating Income 6,155 5,974 (2.9%)
Gross Loan Book 75,756 77,779 2.7%
Net Profit 717 229 (68.1%)
Total Equity 15,657 21,851 39.6%



Alena Zheltova
Corporate Finance and Investor Relations, HCFB
Tel: (+7) 495 514 1017 (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 27% market share in the point-of-sale market and almost an 10.2% market share of the credit card market as at 31 March 2009.

HCFB offers its clients a wide range of credit products with variable credit terms. HCFB’s products are distributed through over 27,000 POS outlets across over 1,200 cities throughout Russia. The Bank’s regional network comprises 92 representative offices, 176 banking offices and 7 branches across the Russian Federation as at 31 March 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.