VEB published interim condensed consolidated financial statements of the VEB Group as at and for the six-month period ended June 30, 2018, as prepared in accordance with IFRS.
“The figures of VEB Group’s 2018 half-year financial statements indicate Vnesheconombank’s ability to generate a positive cash flow from both investing and financing activities. A number of factors including the challenging external environment and increasing interest rates had a negative impact on the bank’s operating performance. The Group’s negative financial result of RUB 75.6 billion is largely attributable to the implementation of IFRS 9,” said Mikhail Poluboyarinov, First Deputy Chairman and Member of the Management Board.
The VEB Group’s key performance indicators are as follows:
- The VEB’ Group assets as at June 30, 2018 went up by 2.9% (+ RUB 98.7 bn) as compared to the end of 2017 to reach RUB 3 474.7 bn, mainly stipulated by the increase in current accounts with banks by RUB 68.0 bn (+19.2%), as well as increase in net investments in leases by RUB 20.3 bn (+11.7%).
- Loans to customers account for 51.9% of the Group’s total assets. As compared to the end of 2017 loans to customers less allowance for impairment went up by RUB 18.3 bn (+1.0%) and reached RUB 1 802.3 bn.
- Total liabilities of the Group as at June 30, 2018 went up by 4.5% (+ RUB 135.6 bn) to RUB 3 115.9 bn, primarily as a result of the rise in the book value of subordinated deposits by 53.2% (+ RUB 50.9 bn) due to the conversion of foreign currency –denominated deposits to roubles, as well as increase in amounts due to the Russian Government and the Bank of Russia by 7.1% (+ RUB 38.1bn). Additionally in accordance with requirements of the new IFRS 9 standard, allowance for impairment of financial guarantees recorded in liabilities was made.
- As of end of H1 2018 the Group recognized a loss of RUB 75.6 bn. The major factor contributing to the negative financial result was a rise in non-interest expense mainly from NWF foreign currency-denominated deposits conversion to roubles, as well as revaluation of loans to customers at fair value in accordance with IFRS 9.
- The Group’s equity in the first quarter of 2018 decreased by RUB 36.9 bn (-9.3%) and as at June 30, 2018 amounted to RUB 358.8 bn. It was negatively affected by the financial result of H1 2018 and IFRS 9 introduction (- RUB 31.2bn).
- The said impact was partly offset by the state support measures. In H1 2018 VEB received two subsidies from the federal budget in the amount of RUB 100.0 bn, as a compensation of costs related to servicing foreign capital market borrowings.
- VEB’s capital adequacy ratio as at June 30, 2018 amounted to 12.9%.