Raiffeisen Bank Aval reports tiny income for 2011
1 February 2012
Raiffeisen Bank Aval (BAVL UK) reported net income of USD 4 mln for 2011 and ROE of 0.4%, according to UAS results released yesterday. Despite a 8% yoy decrease in interest earning assets, net interest income was up 8% yoy due to an improvement in net interest margin.
Raiffeisen Bank Aval 4Q11 and 2011 financials, UAS, USD mln
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2011 yoy 4Q11 qoq yoy
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Net interest income 570 8% 149 -3% 11%
Net fees and commissions 162 12% 45 3% 7%
Operating expenses -410 15% -110 4% 10%
Pre-impairment profit 339 -3% 80 -19% -1%
Impairment charge for credit losses -318 -7% -72 -24% -12%
Net income 4 -3% 1 -31% nm
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2011 qoq yoy
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Assets 6,427 -4% -7%
Gross corporate loans 2,895 -3% 7%
Gross retail loans 2,452 -8% -13%
Loan loss reserve -1,542 -10% 2%
Liabilities 5,617 -4% -8%
Corporate deposits 1,578 -3% 12%
Retail deposits 1,881 -2% -13%
Equity 810 -2% 0%
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Source: Company data
Olena Zuikova: We expect net loans to increase a mere 2% in 2012, with revenues and profit before provisions staying virtually flat. With loan loss reserve of 29%, we think the bank’s accelerated provisioning is nearing an end and that the bank will slash loan loss charges in 2012, taking ROE into the double digits. We note that Aval might report much higher net income under IFRS both for 2011 and 2012 (ROE expected at 10% and 12%, respectively) due lower loan loss provisions.
