Banks - Alfa-Bank

Banks
Russian Federation
OJSC Alfa-Bank
Full Rating Report
Key Rating Drivers
Ratings
Foreign Currency
Long-Term IDR
Short-Term IDR
BBB–
F3
Local Currency
Long-Term IDR
BBB–
Viability Rating
Support Rating
Support Rating Floor
National Long-Term
bbb–
4
B
AA+(rus)
Sovereign Risk
Long-Term Foreign-Currency IDR
Long-Term Local-Currency IDR
Country Ceiling
BBB
BBB
BBB+
Outlooks
Long-Term Foreign-Currency IDR
Long-Term Local-Currency IDR
National Long-Term
Sovereign Long-Term
Foreign-Currency IDR
Sovereign Long-Term
Local-Currency IDR
Stable
Stable
Stable
Stable
Stable
Financial Data
ABH Financial Limited
a
31 Dec 31 Dec
12
11
Total assets (USDm)
Fitch core capital (USDm)
Reported equity (USDm)
Operating profit (USDm)
Published net income
(USDm)
Operating ROAA (%)
Operating ROAE (%)
Basel I Tier 1 ratio (%)
Basel I total capital ratio (%)
Fitch core capital ratio (%)
45,932 31,365
3,444 2,814
4,152 3,435
1,069
762
829
641
2.9
27.9
10.2
15.6
10.0
2.5
22.9
11.9
16.7
10.0
a
ABH Financial Limited, a Cyprus-registered
company, is Alfa’s parent entity. It is at the ABHFL
level that Alfa’s IFRS accounts are published.
Related Research
Strongest Russian Private Bank: OJSC Alfa-Bank’s (Alfa) investment-grade ratings reflect
the bank’s solid franchise and reasonable prospects for further development, its good
management and track record of navigating through successive crises in the Russian market,
and its currently strong balance sheet and performance metrics, based on the consolidated
accounts of its holding company (holdco), ABH Financial Limited (ABHFL; BB+/Stable).
Good Asset Quality: Non-performing loans (NPLs; more than 90 days overdue) were a low
1.1% of gross loans at end-2012. A further 2.7% of loans were restructured but performing,
according to management. The overall impairment reserve level of 4.0% provides a significant
buffer, comparable to cumulative loan write-offs for 2009-2012.
Reasonable Capitalisation: Basel capitalisation reduced slightly with Tier 1 and total capital
ratios (CAR) of 10.2% and 15.6%, respectively, at end-2012 (11.9% and 16.7% at end-2011)
due to 37% loan growth and USD182m of dividends paid by ABHFL in 2012. As dividends were
declared by the holdco and not Alfa, the latter’s regulatory capitalisation ratio (N1) actually
slightly improved to 12.4% at end-5M13 from 11.5% at end-2011. Due to the relaxation of
upcoming Basel III regulations, Fitch estimates that Alfa should not need new equity to comply.
Robust Profitability: Performance is sound, and earnings have been boosted in recent years
by cyclically low impairment charges or reversals. Alfa’s return on equity (ROE) was a high
22% in 2012, but given the decelerating economy and margin compression Fitch expects this
to moderate slightly in 2013. Profitability is supported by the considerable and growing share of
low-cost or interest-free current accounts (25% of end-2012 liabilities), which gives Alfa a
significant cost advantage and the ability to lend to better-quality credits.
Good Liquidity Management: Liquid assets covered about a third of customer accounts at
end-Q113 (this buffer was retained in Q213 based on regulatory accounts), while wholesale
funding maturing in H213-2014 is a moderate USD402m (less than 1% of liabilities).
Market Risk Considerable: Market risk stems from Alfa’s opportunistic investment banking
strategy, capital hedging and, to a lesser extent, good-quality securities portfolio.
Support Possible, Contagion Limited: Alfa’s shareholders have supported the bank in the
past, and, in Fitch’s view, would have a strong propensity to do so again if required. The
completion of the sale of their stake in TNK-BP to Rosneft for USD14bn in Q113 has
considerably improved Alfa’s shareholders’ ability to support Alfa. It has also reduced
contingent risks for the bank from other group assets. Given Alfa’s size and franchise, there is
also a moderate probability of support from the Russian authorities.
ABH Financial Limited (December 2012)
Excel tables for Russian Datawatch H113
Russian Banks Datawatch: H113 (July 2013)
2013 Outlook: CIS and Georgian Banks
(December 2012)
Rating Sensitivities
Limited Ratings Upside: An upgrade of Alfa is unlikely in the near term given the level of
Russia’s sovereign IDRs (BBB/Stable); expected cyclicality in the performance of the Russian
economy, and hence also of the bank; and Alfa’s still moderate market shares.
Analysts
Alexander Danilov
+7 495 956 2408
[email protected]
Anton Lopatin
+7 495 956 7096
[email protected]
www.fitchratings.com
Deep Recession: A deep and prolonged recession in Russia could put pressure on Alfa’s
ratings. Alfa could also be downgraded if the broader Alfa Group (AG) increases leverage to
the extent that this represents, in the agency’s view, a major contingent risk for the bank
(unlikely given the current strong cash position), or in case of a marked deterioration in the
relations of the bank or its shareholders with the Russian authorities.
15 August 2013
Banks
Company Profile
Solid Franchise; Growing Role of Retail
Alfa is the largest universal, privately owned bank in Russia by assets, although its market
share is modest (2.6% at end-H113), reflecting the high banking sector fragmentation below
the three main state-related banks, which together control about 50% of the system. Despite
the state dominance, Alfa is holding up well against competition thanks to its relatively low
funding costs and high quality of service. For the bank’s position/performance relative to peers,
please see Annex 1.
At the core of Alfa’s franchise is a well-managed corporate business, which is aided by the
actively developing and performing retail business and profitable, but opportunistic, investment
banking (IB). Due to the weak economy and low demand for corporate loans, management has
revised its 2013 corporate loan growth forecast to about 10% (broadly in line with Fitch’s
expectation for the whole market) from initial guidance of 20%, while it aims to grow retail loans
by 20%-25% (below Fitch’s market forecast of 30%-35%).
Group Structure and Presentation of Accounts
Alfa is the main part of AG’s broader banking business, which also includes smaller banks in
Ukraine, Kazakhstan and Belarus. Ultimately, all of the banking business is consolidated under
ABH Holdings S.A. (ABHH), although each country’s operations are structured through a
separate sub-holding, making them sister banks.
Alfa’s IFRS accounts are made at the level of ABHFL, a Cyprus-registered company, which, in
addition to Alfa, consolidates broker/trader Alfa Capital Holdings (Cyprus) Limited (ACHCL;
assets of USD2.2bn, equity of USD457m at end-2012) and Dutch-based Amsterdam Trade
Bank (ATB; assets of EUR3.5bn, equity of EUR296m at end-Q113), for which Alfa is the
immediate parent. Before July 2012, ACHCL was also majority owned by Alfa, but then the
latter reduced its stake to 19.9%, having sold 49.8% to ABHFL in order to reduce pressure on
regulatory capitalisation. The analysis of Alfa below is based primarily on the consolidated
accounts of ABHFL and management disclosures.
AG/Alfa is ultimately owned by six individuals, with the largest stakes held by Mikhail Fridman
(36.47%) and German Khan (23.27%).
For more details on the group structure, please see Annex 2.
Ownership, Support and Corporate Governance
Supportive, Cash-Rich Shareholders
Alfa’s shareholders, although owning big investments, do not seem to have much debt and, as
a result of sales of some of their assets in 2010-2013, including the recent sale of shares in
TNK-BP, from which alone they received USD14bn, should be very cash-rich. In addition, they
continue to hold stakes in a few other large assets (part of the broader AG), which are
reasonably cash-generative and moderately leveraged (see Annex 3). This, coupled with a
track record of supporting the bank, including USD800m of emergency liquidity provided in
2004, leads Fitch to believe that future support is possible.
Political Risk Reduced After Sale of TNK-BP and MegaFon
Related Criteria
Global Financial Institutions Rating Criteria
(August 2012)
OJSC Alfa-Bank
August 2013
Like other conglomerates with significant assets in Russia, AG, and consequently Alfa, may be
exposed to some political risk. So far, the shareholders seem to have managed to maintain
reasonable relations with the authorities, reflected, for example, in the significant amount of
government funding received by Alfa during the recent crisis. In addition, AG’s sales of assets
to government and near-government businesses (eg, the Kovytka gas field to Gazprom
(BBB/Stable), shares in STS-Media to National Media Group, and a stake in TNK-BP
(BBB−/RWN) to Rosneft (BBB/RWN)) were not made at punitive prices.
2
Banks
Fitch believes that political/regulatory risks have reduced for AG, because with the sale of its
stake in MegaFon (BB+/Stable) in Q112, it ceased to own shares in two competing mobile
telephone operators (it still has a stake in VimpelCom (NR)), which could have been viewed as
a conflict of interests. The sale of shares in TBK-BP should have relieved any potential tension
with Rosneft as a result of AG’s blocking of the state company’s previous attempt to form an
alliance with BP.
Reasonable Corporate Governance
Fitch considers Alfa’s management to be strong, and in general views positively the close
shareholder oversight of management, which helps to keep the latter focused and reduces the
risk of unexpected losses. The risk of Alfa becoming highly exposed to non-banking assets
within the broader AG is moderate, in Fitch’s view, due to the group’s policy of managing these
companies independently and their generally quite strong credit profiles and cash generation.
Related-party lending has been at a reasonable level (about 30% of equity at end-2012;
reportedly materially reduced in Q113) and usually of solid quality. However, the way Alfa’s
banking group is structured allows capital and liquidity to be moved around quite easily, which
on the one hand increases operational flexibility, but on the other can result, for example, in
Alfa on a standalone basis having lower capital ratios than the group on a consolidated basis.
Performance
Sound Profitability, But Gradual Margin Compression
2012 performance was very strong (USD829m net income, ROE of 22%, with two-thirds
contributed by the corporate/IB segment and one-third by retail (see Annex 4).
The corporate segment’s result was helped by USD60m of reserve releases, which, although
good, is unlikely to be repeated in 2013. At the same time, there has been gradual margin
compression, reflected in a roughly 80bp decrease in the average corporate lending rate in
2012, while funding costs have remained more or less the same. Pressure on the lending rate
and consequently on the net interest margin is likely to persist in 2013, as bigger banks may
follow the example of Sberbank, which has made two lending rate cuts since the beginning of
the year to stimulate demand. Positively, Alfa’s funding costs are still relatively low compared to
other private banks and on a par with larger state banks, so it should maintain its
competitiveness.
The contribution of the retail segment is likely to increase as it grows in size, but some margin
compression is likely, as well as a gradual increase in reserve charges due to growing loss
rates, reflecting increasing household indebtedness in Russia.
The performance of the IB segment is impossible to forecast due to its opportunistic nature. On
the positive side, Alfa has a good track record of being able to find deals and earn money even
in the downcycle.
Overall, Alfa is expecting the same net result for 2013 in absolute terms as for 2012 and hence
slightly lower ROE of about 20%. Based on management’s Q113 management accounts, the
bank is ahead of the plan, but given the decelerating economy and margin compression (as
discussed above), it is reasonable to assume a somewhat less stellar performance in the
coming quarters.
OJSC Alfa-Bank
August 2013
3
Banks
Risk Management
Well-Managed Credit Risks
Figure 1
Loan Concentration and Quality
At end-2012
Gross loans (USDm)
NPLs (USDm)
NPLs (%)
Renegotiated loans (USDm)a
Renegotiated loans/gross loans (%)a
LIR (USDm)
LIR (%)
LIR/NPLs (%)
Net loans (USDm)
Unreserved NPLs (USDm)
Unreserved NPLs/Fitch core capital (%)
Top 20
loans
9,787
59
0.7
399
4.1
9,388
-
Corporate
loans
below top
20
17,390
293
1.7
791
6.5
729
4.2
237.4
16,661
-
Total
corporate
loans
27,177
293
1.1
850
3.1
1,128
4.2
367.4
26,049
-
Retail
loans
4,648
52
1.1
133
2.9
511.5
4,515
-
Total
31,825
345
1.1
850
2.7
1,261
4.0
378.7
30,564
-
a
Risk management data
Source: IFRS statements, Alfa Bank
NPLs reduced to only 1.1% of gross loans at end-2012 from a peak of 14.6% in the crisis due
to active recoveries and write-offs. At end-2012, an additional 2.7% of loans were renegotiated
but performing, according to management. Therefore, the reserve level of 4% looks
comfortable, being comparable to cumulative write-offs for 2009-2012. The regulatory
provisioning level is higher, at 6.9% at end-5M13, providing some flexibility to release reserves,
in Fitch’s view. For additional details on asset quality, please see Annex 5.
Good Quality of Most Larger Exposures; Few Concerns
Alfa’s corporate loan book is relatively concentrated compared to most international
investment-grade peers, with the largest 20 exposures accounting for 30% of gross loans (see
Figure 1). Importantly, Alfa’s primary focus in underwriting is on companies’ cash flows and or
some form of state support/backing, although for some riskier exposures (eg, construction)
collateral is also strong. However, among the largest exposures (for the list at end-2012, please
see Annex 6), there is a significant share of unseasoned loans with bullet repayments, so asset
quality may be volatile, especially in times of stress, although previous robust problem loan
workouts give some comfort.
No Major Concerns Over Related-Party Exposures
Although the overall size of Alfa’s related-party exposure is significant (see Annex 7), the
composition/quality is reasonable, significantly reducing potential concerns. Also the exposure
should have decreased by USD700m-800m since the beginning of the year, as some items
have been repaid. Although the shareholders have historically been net creditors to Alfa on a
consolidated basis, this may not be the case on a standalone basis.
The main credit exposure item (general lending) consists of ordinary business loans to decentquality companies, mainly X5 (the company would have been profitable if not for a USD467m
one-off impairment of property, intangibles and financial leases; see Annex 3) and Altimo (AG’s
vehicle for holding VimpelCom shares). This category amount should have decreased by about
40% since end-2012, as Altimo exposure was fully repaid in Q113.
Alfa Distressed Assets (ADA) was set up during the crisis to deal with Alfa’s assets obtained in
the course of the restructuring of impaired loans. Although initially it was about 40% reserved,
reflecting expected recoveries, in 2012 the decision was taken to write off most of the exposure.
Fitch understands that the group has not given up on recovering the underlying exposures and
therefore it could be viewed as a dividend-in-kind.
OJSC Alfa-Bank
August 2013
4
Banks
Alfa’s investment in Pamplona Credit Opportunities Fund (Pamplona) was sold to shareholders
for cash and at balance sheet value in Q113, which is positive, as Fitch considered the
investment risky due to poor transparency and had previously deducted it from the calculation
of Fitch core capital (FCC).
As Fitch previously expected, USD93m of receivables from ABHH were netted off against
dividends from ABHFL in 2012 (there were no dividends from the bank itself). This is credit
neutral, as Fitch previously deducted this receivable from the calculation of FCC.
Fitch continues to conservatively deduct from FCC a USD132m subordinated loan to Alfa Bank
Ukraine (ABU) due in 2018. However, the total impact of this on FCC is only 30bp.
Sound Quality of Retail Loans; Gradual Uptick in Loss Rates
In retail lending (15% of the total portfolio), Alfa is mostly expanding in cash loans, credit cards
and consumer finance. There was a modest uplift in retail NPL origination (the ratio of net
increase in NPLs plus write-offs divided by average performing loans) to 3.8% in 2012 from
3.1% in 2011, which is moderate relative to other large players. For consumer loans (29% of
retail loans), this ratio was a higher 7.1% in 2012, which is more in line with the market (see
Annex 5). The bank plans to continue with retail expansion, which may translate into higher
impairment charges, although there is a considerable safety margin due to high lending rates of
up to 35%.
Reverse Repos Adequately Collateralised
Reverse repos are concentrated, with the top 10 accounting for 75% of the total at end-2012.
Most counterparties have low ratings/are unrated, so the focus is on collateral, which is a
mixture of shares and bonds, mostly of Russian blue chips. For most deals, the tenor is rather
short-term (about two weeks), although some deals are for up to one year, but the risk is
adequately captured by haircuts (about 50% for shares at longer tenors), and margin calls exist.
Limited Credit Risk in Securities Book
Alfa’s securities book is considerable, but is weighted toward government bonds and debt
securities of better-quality corporates and banks (see Figure 2). The corporate fixed income
book is reasonably diversified: excluding one big USD498m position in promissory notes of a
Russian state-owned bank, the second largest was below USD100m. Positively, a previously
held about USD140m of potentially risky low-rated bonds of non-defaulted Kazakh and Belarus
banks have been sold. The equities book (excluding Pamplona, which was sold in Q113) is
small and good quality, but rather concentrated (five positions make up about 90%).
Figure 2
Securities Book (End-2012)
Sovereign and municipal bonds
Corporate debt securities
Equity investments
O/w Pamplona Fund(s)
Total
O/w pledged under repo
Exposure (USDm)
1,477
2,733
720
362
4,930
Total (%)
30.0
55.5
14.6
7.3
100.0
Equity (%)
35.6
65.8
17.3
8.7
118.7
Source: IFRS accounts, Alfa
Bank Placements Decent
Most bank exposures (net of reverse repos) are to highly rated foreign banks and top Russian
banks. There is some concentration due to ATB’s placements in one large foreign bank (rated
A+ by Fitch), which may be of a fiduciary nature. As Alfa has limited access to liquidity held by
ATB, Fitch excludes the respective amounts from the bank’s liquidity position (see Annex 8).
Low-Risk Guarantees
Guarantees represent a relatively big business for Alfa (about USD6.4bn at end-2012).
OJSC Alfa-Bank
August 2013
5
Banks
Generally, this business is very concentrated but low-risk due to the state nature of many
counterparties and/or some state involvement (eg, guarantees provided under state contracts).
Considerable Market Risk
Market risk stems from capital hedging (ABHFL has a consolidated long dollar position of
around USD2.8bn, while the bank as a regulated entity only has small open position), from
occasional proprietary risk-taking and to lesser extent from securities. However, Alfa has a
good track record in managing such risks.
Funding and Liquidity
Prudent Liquidity Management
Alfa has a relatively liquid loan book (especially the retail part), adequate liquidity reserves and
contingency options (in aggregate over USD8bn) sufficient to repay some 30% of customer
accounts. Excluded from these liquidity reserves are USD648m of cash and equivalents held
by ATB to which Alfa has limited access. For details, please see Annex 8.
High Share of Current Accounts an Advantage
Some 65% of funding is customer accounts, of which 40% are interest-free current accounts,
which Alfa manages to attract despite the competition (growth of USD2.4bn in 2012). These
contribute to a relatively low funding cost in line with state banks, which in an increasingly
competitive environment gives Alfa a significant advantage.
Moderate Refinancing Risk
Wholesale/bank funding made up about a quarter of liabilities at end-2012. The bulk is shortterm interbank funding, which is typically stable and rolling over. It could be less reliable in
times of stress, but Alfa’s significant liquidity buffer mitigates the risk. Remaining wholesale
repayments in H213 are a moderate USD402m, or less than 1% of liabilities, while 2014’s are
close to zero. For details, please see Annex 9.
Capitalisation
Reasonable Basel Capitalisation; Regulatory Tighter
Basel ratios have decreased somewhat since end-2011 due to growth and USD182m
dividends paid by ABHFL (largely offset against receivables from ABHH). As dividends were
declared by the holdco and not Alfa, the regulatory capitalisation actually slightly improved and
was also supported by USD750m of subordinated notes placed in September 2012. However,
regulatory capital is somewhat tighter than Basel due to higher loan impairment reserves in
Figure 3
Loss Absorption Capacity (LAC)
(USDm)
Tier 1 capital
Tier 2 capital
Total capital
Tier 1 ratio (%)
Total capital adequacy ratio (%)
Risk-weighted assets
Gross loans
Current LIR
Additional LIR capacitya
Maximum LIR capacitya
Current LIR/gross loans (%)
Additional LIR cap/gross loans (%)a
Maximum LIR/gross loans (%)a
Targeted or covenanted total capital
adequacy ratio (%)
End-5M13
Regulatory
3,132
2,744
5,876
6.6
12.4
47,270
32,696
2,245
803
3,053
6.9
2.5
9.3
10
End-2012
IFRS Regulatory
3,995
2,975
2,091
2,638
6,086
5,613
10.2
6.1
15.6
11.5
38,998
48,769
31,825
32,488
1,261
2,472
1,598
565
2,859
3,037
4.0
7.6
5.0
1.7
9.0
9.3
12
10
End-2011
IFRS Regulatory
3,362
1,829
1,348
1,671
4,710
3,499
11.9
6.0
16.7
11.5
28,218
30,536
23,172
23,567
1,368
2,393
1,504
318
2,872
2,711
5.9
10.2
6.5
1.3
12.4
11.5
12
10
Note: In analysing capital, Fitch’s primary focus is on loss-absorbing capital, as expressed by Fitch core capital.
However, the Basel total capital ratio is used here in order to provide comparison with regulatory capital.
a
LIR which the bank could create without total capital ratio falling below targeted/covenanted total capital adequacy ratio
Source: IFRS accounts, Fitch estimates
OJSC Alfa-Bank
August 2013
6
Banks
local accounts and some of the earnings being attributable to ACHCL and other offshore
entities, which are consolidated in ABHFL.
Considerable Loss Absorption Capacity
At end-2012, Alfa could have withstood about 9% of credit losses before its Basel I total capital
adequacy ratio decreased to 12%. On a standalone basis, its loss absorption capacity is similar,
at about 9.3%, at end-5M13. This should also be viewed in the context of Alfa’s good asset
quality, robust pre-impairment profitability and its owners’ apparent ability to provide capital if
needed.
No New Equity Needed to Comply With Basel III
Fitch estimates that Alfa should not need new equity to comply with Basel III regulations, which
will be introduced by 1 January 2014, because the requirements have been significantly
relaxed compared to those initially indicated by the regulator. The agency had previously
estimated that due to the significant (45%) Tier 2 component of regulatory capital, Alfa would
need about USD0.5bn of new equity to comply, although even this was not a significant
concern given potential capacity to release reserves in the statutory accounts and the owners’
apparent ability to provide new capital.
OJSC Alfa-Bank
August 2013
7
Banks
Annex 1
Figure 4
Performance Relative to Peers
(%)
Franchise
% of sector assets
% of sector equity
Profitability
Interest income/average earning assets
Interest expense/average interest-bearing liabilities
Net interest margin
Cost/income ratio
Pre-impairment operating ROAA
Loan impairment charge/pre-impairment oper. profit
ROAA
ROAE
Loan book and quality
Loans/assets
Loan growth
Retail loans/total loans
Generated NPLs (recovery)/average performing loans
Loan impairment charge/average loans
NPLs/gross loans
LIR/gross loans
LIR/NPLs
Impaired loans less reserves for imp loans/equity
Additional LIR/gross loans
Maximum LIR/gross loansb
Liquidity and funding
Liquid assetsa/customer funding
Loans/customer deposits
Customer funding/total liabilities
Wholesale & money markets funding/total liabilities
Capitalisation
Fitch core capital/risk-weighted risks
Equity/assets
Basel I total CAR
Fixed assets and intangibles/equity
Total assets (USDbn)
Total equity (USDbn)
Russian
sector data,
End-2012
Alfa
(BBB–/Stable/bbb–)
2012
2011
2010
Sberbank of Russia
(BBB/Stable/bbb)
2012
2011
2010
ZAO Unicredit Bank
(BBB/Negative/bbb–)
2012
2011
2010
ZAO Raiffeisen Bank
(BBB+/Stable/bbb–)
2012
2011
2010
100.0
100.0
3.0
2.2
2.4
2.1
2.7
2.2
32.1
27.4
26.0
24.2
27.3
22.7
1.8
1.9
1.9
1.7
1.8
1.6
1.4
1.8
1.5
1.8
1.6
2.0
9.0
4.4
4.7
41.9
3.4
14.0
2.3
18.6
9.7
4.4
5.3
49.5
3.1
8.2
2.2
21.7
10.0
4.6
5.4
51.8
3.0
16.3
2.1
19.2
11.3
4.9
6.4
44.3
4.4
33.8
2.3
19.2
10.6
3.9
6.7
48.7
3.7
5.6
2.7
24.2
10.6
3.4
7.2
48.1
4.3
0.2
3.4
28.0
12.0
4.6
7.5
41.9
5.1
41.0
2.4
20.7
6.9
4.1
3.2
30.8
3.2
11.1
2.2
18.0
6.5
3.0
3.7
31.4
3.5
11.8
2.5
20.6
7.4
2.7
4.8
35.1
3.4
28.6
1.9
16.1
8.7
3.0
5.3
48.3
3.6
2.5
2.8
17.6
8.6
2.9
5.6
55.9
2.9
-12.0
2.5
15.4
7.8
2.4
5.3
55.8
2.8
34.4
1.4
8.9
58.7
21.5
26.0
66.5
38.4
14.6
1.2
0.4
1.1
4.1
372.7
-22.1
6.6
10.7
69.5
23.2
11.9
-0.9
0.7
1.5
6.2
413.3
-30.1
8.6
14.8
59.0
20.4
12.6
-4.9
2.3
3.8
7.7
202.6
-23.0
10.1
17.8
69.5
32.0
25.6
0.4
0.2
3.2
5.1
159.4
-13.2
5.3
10.4
71.2
35.4
21.5
-0.1
0.0
4.9
7.9
161.2
-20.2
7.0
14.9
63.6
13.7
21.3
0.4
2.7
7.3
11.4
156.2
-25.5
8.8
20.2
58.1
4.8
22.6
0.1
0.6
18.9
3.2
16.9
1.3
7.7
10.9
61.2
23.0
17.9
0.5
0.6
3.8
3.3
86.8
2.9
4.3
7.6
67.2
10.2
16.6
1.0
1.4
4.8
3.9
81.3
4.7
5.8
9.7
57.8
3.1
32.4
0.6
0.2
4.5
5.4
120.0
-3.1
13.4
18.8
58.6
21.6
27.5
-1.3
-0.4
4.6
6.0
130.4
-5.6
8.8
14.8
55.8
14.9
25.2
0.6
1.4
7.4
8.7
117.6
-4.5
11.4
20.1
36.4
113.7
64.2
23.2
29.3
120.8
65.4
23.7
43.2
106.5
66.2
22.3
14.2
108.7
77.8
13.4
14.7
105.7
85.6
8.8
22.6
93.1
90.6
7.0
49.0
99.9
66.7
24.3
43.9
103.8
67.7
25.5
31.8
118.3
65.3
26.9
38.2
97.3
75.5
16.9
36.1
94.5
78.4
16.8
34.9
108.3
67.9
27.3
10.0
9.0
15.6
16.0
45.9
4.2
10.0
11.0
16.7
12.6
31.4
3.4
10.7
10.8
18.2
12.7
28.5
3.1
11.0
10.7
13.7
30.7
497.1
53.5
12.1
11.7
15.2
30.6
336.5
39.4
12.9
11.4
16.8
30.1
284.3
32.5
15.2
13.0
15.0
7.7
28.6
3.7
12.7
11.4
12.8
9.4
24.0
2.7
14.3
12.1
14.5
8.8
18.9
2.3
18.6
16.9
19.3
23.1
21.0
3.5
13.9
15.8
15.2
21.9
18.8
3.0
15.8
16.9
16.3
24.3
16.7
2.8
0.7
6.0
7.0
117.5
-5.3
106.4
67.9
19.2
12.6
18.4
1,549.7
194.6
a
Cash, due from banks and unpledged government securities
Source: IFRS financial statements of banks adapted by Fitch
OJSC Alfa-Bank
August 2013
8
Banks
Annex 2
Figure 5
Alfa Group Structure
Mikhail Fridman,
German Khan,Alexey
Kousmichoff
77.86%
ABH Holdings S. A.
(Luxembourg)
100%
100%
ABH Ukraine
Ltd (Cyprus)/
Alfa Bank
Ukraine
ABH
Kazakhstan
Ltd (Cyprus)/
Alfa Bank
Kazakhstan
98.96%
CJSC AlfaBank Belarus
100%
ABH Russia Limited
(Cyprus)a
100%
Crown
Finance
Foundation
100%
CTF Holdings
Ltd.
100%
ABH Financial
Limited
(Cyprus)
100%
80.1%
OJSC AB Holding
(Russia)
99.9%
Alfa Capital
Holdings
(Cyprus) Limited
19.9%
OJSC Alfa Bank
(Russia)
100%
72.77%
A Common
Holdings Ltd
Altimo Holdings
and Investments
Ltd
100%
47.85%
A1 Group Ltd
Vimpelcom
77.84%
Alfa Finance Holdings S.A
Main assets:
- 13.22% in Turkcell
- 85.46% Alfa Insurance
- 92.78% Alfa Asset
Management
- 100% Alfa Private Equity
- 100% ADA Holdings
100%
Amsterdam Trade
Bank
(Netherlands)
X5 Retail Group
N. V.
47.86%
Ventrelt Holdings
Ltd
100%
Rosvodokanal
Group
Note: The above structure represents the high-level, effective ownership and operational structure of Alfa Group. It does not depict the complete legal structure of the
subholdings
a
ABH Russia Limited will be liquidated to simplify ownership structure
Source: www.alfagroup.org
OJSC Alfa-Bank
August 2013
9
Banks
Annex 3: Shareholders’ Assets
Figure 6
Shareholders’ Main Corporate Assetsa
AG’s
Fitch
Net
share of
Debt
Debt/ Dividends dividends
Long-term Stake Revenue EBITDA income
ratings
(%) (USDm) (USDm) (USDm) (USDm) EBITDA
(USDm) (USDm)
Company
Industry
Country
VimpelCom
Telecommunications Russia, Ukraine NR
47.9
23,061
9,768
1,982 29,081
3.0
1,321
633
Turkcell
Telecommunications Turkey
NR
13.2
5,866
1,808
1,147
1,707
0.9
X5 Retail Group Food retail
Russia
NR
47.9
15,795
1,124
-126
4,027
3.6
b
Rosvodokanal
Infrastructure
Russia, Ukraine BB–/Stable 100.0
424
62
n.a.
171
2.8
3
3
Kronverk Cinema Entertainment
Russia
NR
100.0
24
1
1
42
35.3
n.a.
n.a.
Formula Kino
Entertainment
Russia
NR
55.6
0
-1
-1
0
n.a.
n.a.
n.a.
Nezavisimost
Car dealer
Russia
NR
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Systematica
IT
Russia
NR
n.a.
87
n.a.
n.a.
0
n.a.
n.a.
n.a.
BelMarket
Food retail
Belarus
NR
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Alfa Insurance
Insurance
Russia
BB–/Positive 85.5
n.m.
n.a.
14
30
n.a.
Total
45,258 12,763
3,017 35,058
2.7
1,324
636
a
IFRS data for 2012, 2011, except Kronverk Cinema, Formula Kino and Systematica (Russian GAAP for 2011)
Rating of holdco Ventrelt Holdings Ltd
Source: Companies’ accounts
b
Figure 7
Shareholders’ Main Banking Assetsa
Bank
Alfa Bankb
Fitch Longterm ratings
BBB–/Stable
Country
Russia,
Netherlands,
Cyprus
Ukraine
B–/Stable
Alfa Bank
Ukraine
Alfa Bank
Kazakhstan B+/Stable
Kazakhstan
Alfa Bank
Belarus
NR
Belarus
Total
a
b
PreNPLs/
Net
Net Loans/ gross
impairment
Stake Assets loans
NPLs
LIR Equity
profit income assets loans
(%) (USDm) (USDm) (USDm) (USDm) (USDm)
(USDm) (USDm)
(%)
(%)
100.0 45,932 30,564
345
1,261
4,152
1,164
829
66.5
1.1
LIR/ Equity/
NPLs assets
(%)
(%)
365.5
9.0
100.0
2,839
2,093
485
309
212
10
6
73.7
20.2
63.7
7.5
100.0
869
557
3
27
134
33
19
64.1
0.6
787.4
15.4
98.96
315
197
0
13
31
4
0
62.5
0.0 115,311
9.7
49,956
33,411
833
1,610
4,529
1,211
854
Financial data for 2012
Including subsidiary Dutch-based bank ATB and Cyprus-based trading business
Source: Banks’ accounts
Figure 8
Shareholders’ Major Sales and Acquisitions of Assets
Company
Pamplona Fundsa
STS Media
MegaFon
VimpelCom
TNK-BP
Coinmach Service Corp. & AIR-servb
Net proceeds from transactions
Industry
Diversified investments
TV channel
Mobile telecommunications
Mobile telecommunications
Oil & gas
Laundry, car pay air service
Date of
transaction
2010
Q211
Q112
9M12
Q113
Q213
Stake sold/acquired
(%)
26.0
25.0
23.0
25.0
100.0
Sale proceeds (acquisition
expenditures) (USDm)
-1,500
1,070
3,800
-4,134
14,000
-1,400
11,836
a
AG is a major investor and limited partner in Pamplona Funds, including Pamplona Global Financial Institutions Fund that has taken the 5% stake in Unicredit Spa AG has
committed to invest EUR1.9bn more in Pamplona Funds
b
Assets were acquired by Pamplona Capital Management
Source: Companies’ accounts
OJSC Alfa-Bank
August 2013
10
Banks
Annex 4: Segment Results
Figure 9
Segment Results in 2012 (USDm)
Net interest income
Average gross loans
Average lending rate (%)
Segment profit before tax (PBT)
Segment average assets
PBT/segment avg. assets (%)
Corporate and IBa
2,033
23,797
8.5
834
24,521
3.4
Retail
785
3,702
21.2
338
3,554
9.5
Treasury
Total
-25
4,445
-0.6
1,147
32,519
3.5
Corporate and IBa
1,683
18,153
9.3
632
18,619
3.4
Retail
581
2,521
23.1
264
2,414
10.9
Treasury
Total
-104
3,903
-2.7
792
24,936
3.2
Corporate and IBa
290
14,348
2.0
Retail
208
2,086
10.0
Treasury
122
4,231
2.9
Total
620
20,664
3.0
a
Including USD156m of IB profit (based on management accounts)
Source: IFRS statements, Fitch estimates
Figure 10
Segment Results in 2011 (USDm)
Net interest income
Average gross loans
Average lending rate (%)
Segment profit before tax (PBT)
Segment average assets
PBT/segment avg. assets
a
Including USD167m of IB profit (based on management accounts)
Source: IFRS statements, Fitch estimates
Figure 11
Segment Results in 2010 (USDm)
Segment profit before tax (PBT)
Segment average assets
PBT/segment avg. assets
a
Including USD286m of IB profit (based on management accounts)
Source: IFRS statements, Fitch estimates
OJSC Alfa-Bank
August 2013
11
Banks
Annex 5: Loan Quality
Figure 12
At End-2012
Credit cards and PILs
Consumer loans
Mortgage loans
Car loans
Total retail loans
General corporate loans
SME loans
Lease financing
Total corporate loans
Total loan book
a
Gross loans
(USDm)
2,905
1,408
295
40
4,648
25,598
474
1,105
27,177
31,825
Growth of
gross loans,
y-o-y (%)
112.0
44.6
-8.1
-55.6
68.7
33.9
-17.1
51.6
33.1
37.3
Performing
loans
(USDm)
2,879
1,385
292
40
4,596
25,317
462
1,105
26,884
31,480
Loan
impairment
provision
(USDm)
73
56
2
2
133
1,044
45
39
1,128
1,261
Net loans
(USDm)
2,832
1,352
293
38
4,515
24,554
429
1,066
26,049
30,564
Year-end
NPLs
(USDm)
26
23
3
52
281
12
293
345
NPLs
originated
(recovered)
in 2012
(USDm)
57
83
1
141
165
-9
6
162
303
Written-off
Renego
loans -tiated loans
(USDm)
(USDm)a
38
72
4
1
115
169
n.a.
1
n.a.
6
n.a.
176
850
291
850
NPLs 90+
(%)
0.9
1.6
1.0
1.1
1.1
2.5
1.1
1.1
Renegotiated loans
(%)
n.a.
n.a.
n.a.
3.1
2.7
Loan
impairment
provision
(%)
2.5
4.0
0.7
5.0
2.9
4.1
9.5
3.5
4.2
4.0
NPLs
originated
(recovered)
in 2012/Avg
performing
loans
(%)
2.7
7.1
0.3
3.8
0.7
-1.8
0.7
0.7
1.1
Loan
impairment
provision
(%)
1.5
3.0
1.9
2.2
2.1
6.1
11.9
11.1
6.4
5.9
NPLs
originated
(recovered)
in 2011/Avg
performing
loans
(%)
2.4
5.2
1.3
3.1
-1.8
3.8
1.9
-1.5
-0.9
Risk-management data
Source: IFRS statements, Alfa
Figure 13
At End-2011
Credit cards and PILs
Consumer loans
Mortgage loans
Car loans
Total retail loans
General corporate loans
SME loans
Lease financing
Total corporate loans
Total loan book
a
Gross loans
(USDm)
1,370
974
321
90
2,755
19,116
572
729
20,417
23,172
Growth of
gross loans,
y-o-y (%)
66.3
9.3
-9.6
-58.3
20.5
31.0
138.3
-31.2
28.5
27.5
Performing
loans
(USDm)
1,363
962
315
89
2,729
18,831
550
729
20,110
22,839
Loan
impairment
provision
(USDm)
21
29
6
2
58
1,161
68
81
1,310
1,368
Net loans
(USDm)
1,349
945
315
88
2,697
17,955
504
648
19,107
21,804
Year-end
NPLs
(USDm)
7
12
6
1
26
285
22
307
333
NPLs
originated
(recovered)
in 2011
(USDm)
26
48
2
76
-290
15
17
-258
-182
Written-off
loans
(USDm)
27
46
9
4
86
38
1
32
71
157
Renegotiated loans
(USDm)a
n.a.
n.a.
n.a.
1,180
1,180
NPLs 90+
(%)
0.5
1.2
1.9
1.1
0.9
1.5
3.8
1.5
1.4
Renegotiated loans
(%)
n.a.
n.a.
n.a.
5.8
5.1
Risk-management data
Source: IFRS statements, Alfa
OJSC Alfa-Bank
August 2013
12
Banks
Figure 14
At End-2010
Credit cards and PILs
Consumer loans
Mortgage loans
Car loans
Total retail loans
General corporate loans
SME loans
Lease financing
Total corporate loans
Total loan book
Gross loans
(USDm)
824
891
355
216
2,286
14,590
240
1,059
15,889
18,175
Growth of
gross loans,
y-o-y (%)
-1.3
114.7
-17.1
-49.3
8.7
26.7
105.1
-12.7
23.7
21.5
Performing
loans
(USDm)
816
881
340
213
2,250
13,977
232
1,044
15,253
17,503
Loan
impairment
provision
(USDm)
17
24
10
5
56
1,098
20
206
1,324
1,380
Net loans
(USDm)
807
867
345
211
2,230
13,492
220
853
14,565
16,795
Year-end
NPLs
(USDm)
8
10
15
3
36
613
8
15
636
672
NPLs
originated
(recovered)
in 2010
(USDm)
22
31
3
9
65
-871
-14
65
-820
-755
Written-off
loans
(USDm)
40
27
16
14
97
375
Renegotiated loans
(USDm)a
50
425
522
410
1,033
1,033
623
NPLs 90+
(%)
1.0
1.1
4.2
1.4
1.6
4.2
3.3
1.4
4.0
3.7
Renegotiated loans
(%)
4.3
38.7
6.5
5.7
Loan
impairment
provision
(%)
2.1
2.7
2.8
2.3
2.4
7.5
8.3
19.5
8.3
7.6
NPLs
originated
(recovered)
in 2010/ Avg
performing
loans
(%)
2.7
4.8
0.8
2.9
3.0
-7.4
-8.6
5.8
-6.3
-4.9
Loan
impairment
provision
(%)
6.1
4.1
4.7
3.1
4.8
10.2
22.2
16.8
10.9
10.1
NPLs
originated
(recovered)
in 2009/ Avg
performing
loans
(%)
13.6
8.6
5.9
6.3
9.4
14.7
8.1
13.2
12.7
Source: IFRS statements, Alfa
Figure 15
At End-2009
Credit cards and PILs
Consumer loans
Mortgage loans
Car loans
Total retail loans
General corporate loans
SME loans
Lease financing
Total corporate loans
Total loan book
Gross loans
(USDm)
835
415
428
426
2,104
11,519
117
1,213
12,849
14,953
Growth of
gross loans,
y-o-y (%)
-13.2
-18.8
-15.9
-39.6
-21.7
-22.3
-58.8
-11.6
-22.0
-22.0
Performing
loans
(USDm)
809
409
400
418
2,036
9,660
95
1,213
10,968
13,004
Loan
impairment
provision
(USDm)
51
17
20
13
101
1,173
26
204
1,403
1,504
Net loans
(USDm)
784
398
408
413
2,003
10,346
91
1,009
11,446
13,449
Year-end
NPLs
(USDm)
26
6
28
8
68
1,859
22
1,881
1,949
NPLs
originated
(recovered)
in 2009
(USDm)
119
39
27
35
220
1,787
15
1,802
2,022
Written-off
loans
(USDm)
110
43
Renegotiated loans
(USDm)a
34
187
89
1,561
89
276
154
1,715
1,715
NPLs 90+
(%)
3.1
1.4
6.5
1.9
3.2
16.1
18.8
14.6
13.0
Renegotiated loans
(%)
13.6
12.7
13.3
11.5
Source: IFRS statements, Alfa
OJSC Alfa-Bank
August 2013
13
Banks
Annex 6
Figure 16
Top 25 Groups of Borrowers (Excluding Related Parties and Reverse Repo)
Description
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Borrower industry
Development and
construction
Military
Power generation, Chemicals
and petrochemicals, Other
Non-ferrous metallurgy
Natural gas industry,
Construction
Trade and commerce
Trade and commerce
Power generation
Finance and investment
companies
Railway transport
Ferrous metallurgy
Ferrous metallurgy
Ferrous metallurgy
Ferrous metallurgy
Ferrous metallurgy
Military
Nuclear industry
Food industry, Agribusiness
Coal Industry
Food industry
Aviation transport
Construction
Diamond extraction and
processing
Trade and commerce, Other
Trade and commerce
Total
Stateowned
(yes/no)
no
Gross Exposure
Of gross
Amount
loans
(USD)
(%)
900
2.8
Terms
Quality & Reserves
Main currency
USD
Mostly bullet or
amortising
bullet
Tenor
(years)
7.7
NPL Provision, Provision, IFRS
(yes/no) IFRS (USD)
(%)
no
29
3.2
Net Exposure
Net exposure/
Amount
Fitch core Fitch
(USD)
capital (%) risk assessment
871
25.3 Moderate risk
yes
no
694
640
2.2
2.0
USD, RUR, EUR
RUR, USD
bullet
bullet
2.7
2.3
no
no
39
42
5.7
6.5
655
598
19.0 Low risk
17.4 Moderate risk
no
no
631
603
2.0
1.9
USD, RUR
RUR, USD
amortising
amortising
1.5
1.9
no
no
22
23
3.5
3.8
609
580
17.7 Low risk
16.8 Low risk
no
no
yes
yes
603
481
463
385
1.9
1.5
1.5
1.2
USD, RUR
USD
RUR
RUR, USD
amortising
bullet
bullet
amortising
6.4
1.8
6.1
4.6
no
no
no
no
11
16
5
21
1.9
3.3
1.0
5.5
591
465
459
364
17.2
13.5
13.3
10.6
Moderate risk
Moderate risk
Low risk
Low risk
no
no
no
no
no
no
yes
yes
no
no
no
no
no
no
363
340
336
330
327
304
259
244
240
215
214
203
203
200
1.1
RUR/USD
1.1 RUR, EUR, Other
1.1
RUR
1.0
RUR
1.0
USD, RUR
1.0
USD
0.8
USD
0.8
RUR
0.8
RUR
0.7
USD, RUR
0.7
RUR
0.6
RUR
0.6
RUR
0.6
USD
amortising
bullet
bullet
bullet
amortising
amortising
bullet
bullet
amortising
bullet
amortising
amortising
amortising
bullet
0.1
1.6
6.0
2.0
1.5
7.5
1.1
0.1
3.3
0.8
3.3
4.8
4.6
3.0
no
no
no
no
no
no
no
no
no
no
no
no
no
no
5
18
28
27
34
15
5
7
2
12
6
2
4
4
1.4
5.2
8.2
8.2
10.3
5.0
2.0
2.7
0.7
5.8
2.8
0.8
1.8
2.1
360
322
308
303
293
289
254
237
239
202
208
201
199
196
10.4
9.3
8.9
8.8
8.5
8.4
7.4
6.9
6.9
5.9
6.0
5.8
5.8
5.7
Moderate risk
Moderate risk
Moderate risk
Moderate risk
Moderate risk
Moderate risk
Low risk
Low risk
Low risk
Moderate risk
Low risk
Moderate risk
Moderate risk
Low risk
no
no
187
176
9,541
bullet
amortising
4.0
6.4
3.6
no
no
2
2
380
1.2
1.2
4
185
295
9,284
0.6
0.6
30.0
RUR
USD, EUR
5.4 Low risk
5.0 Low risk
266.0
Source: IFRS statements, Alfa Bank
OJSC Alfa-Bank
August 2013
14
Banks
Annex 7: Transactions with Related Parties
Figure 17
Related-Party Assets
At end-2012
General lending
Credit exposure to ADA
Other On-BS exposures
Off-BS exposures
Total AG
Gross
exposure
(USDm)
1,009
314
982
298
2,603
LIR
(USDm)
23
29
52
At end-2011
Net
exposure
(USDm)
986
285
982
298
2,551
% of equity
24
7
24
7
61
Gross
exposure
(USDm)
872
453
621
64
2,010
LIR
(USDm)
42
200
242
Net
exposure
(USDm)
830
253
621
64
1,768
% of equity
25
13
18
2
59
Source: Fitch
Figure 18
Related-Party Liabilities
TNK-BP
Alfa Group and shareholders
ADA and associates
Total
At end-2012
Amount (USDm)
295
2,942
42
3,279
% of liabilities
1
7
0
8
At end-2011
Amount (USDm)
316
2,056
72
2,444
% of liabilities
1
7
0
9
Source: Fitch
OJSC Alfa-Bank
August 2013
15
Banks
Annex 8
Figure 19
Liquidity
(USDm)
Cash sourcesa
Cash on hand
Correspondent accounts with central banks
Correspondent accounts with other banks
Overnight placements with other banks
Deduction of cash and cash equivalents in ATB
Cash and cash equivalents
Due from other banks (short-term)
Additional liquidity sources (at mid-May 13) , incl:
HFS portfolio
Repoable fixed income portfolio
Loan portfolio eligible for CBR repo
Total additional liquidity sources
Total available liquidity
Average monthly proceeds from loan repaymentsb
Cash usesa
Loans from banks
Eurobonds (MTN, LPN)
ECP
Loan from SDIA
Syndicated loan
VEB subordinated debt
Russian bonds
Subordinated debt
Wholesale/money markets debt repayments in next 12m
Potential repayments to government related entities, incl
Due to CBR (non-repo)
Deposits of Ministry of Finance, state and regional budgets
Non-core deposits from large state entities
Total potential repayments to government related entities
Total repayments & other potential cash uses
Total available liquidity net of wholesale/money markets debt repayments in next 12m
Total available liquidity net of total potential cash uses
Total available liquidity/сustomer accounts (%)
Total available liquidity net of total potential cash uses/сustomer accounts c (%)
Monthly proceeds from loan repayments/сustomer accounts (%)
Q113
984
1,173
1,152
1,257
648
3,919
740
900
523
2,003
3,426
8,085
1,322
5,186
293
487
122
6,088
22
1,148
1,207
2,377
9,113
1,997
-1,028
33.4
-4.7
5.5
a
Excluding loan issuance/repayments and other items
Bank estimate; Fitch conservatively excludes loan proceeds from calculation of liquid assets
c
Customer accounts are net of Ministry of Finance/regional budgets/other non-core government deposits
b
Source: IFRS Statements, Bank, Fitch estimates
OJSC Alfa-Bank
August 2013
16
Banks
Annex 9
Figure 20
Wholesale Debt Maturities
2013
Total 2013
2014
Total 2014
Total 2015
Beyond 2015
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
DPR
-
Syndicated
loan
-
Loan from
SDIA
122
122
-
Eurobonds
(MTN, LPN)
293
293
590
2,032
ECP
187
99
130
51
467
20
-
VEB
Subordinated Subordinated
debt
debt
980
1,150
Ruble
Bonds
431
475
TOTAL
480
99
130
173
882
20
1,021
4,637
Source: Fitch
OJSC Alfa-Bank
August 2013
17
Banks
ABH Financial Limited
Income Statement
Year End
USDm
Unqualified
1. Interest Income on Loans
2. Other Interest Income
3. Dividend Income
4. Gross Interest and Dividend Income
5. Interest Expense on Customer Deposits
6. Other Interest Expense
7. Total Interest Expense
8. Net Interest Income
9. Net Gains (Losses) on Trading and Derivatives
10. Net Gains (Losses) on Other Securities
11. Net Gains (Losses) on Assets at FV through Income Statement
12. Net Insurance Income
13. Net Fees and Commissions
14. Other Operating Income
15. Total Non-Interest Operating Income
16. Personnel Expenses
17. Other Operating Expenses
18. Total Non-Interest Expenses
19. Equity-accounted Profit/ Loss - Operating
20. Pre-Impairment Operating Profit
21. Loan Impairment Charge
22. Securities and Other Credit Impairment Charges
23. Operating Profit
24. Equity-accounted Profit/ Loss - Non-operating
25. Non-recurring Income
26. Non-recurring Expense
27. Change in Fair Value of Own Debt
28. Other Non-operating Income and Expenses
29. Pre-tax Profit
30. Tax expense
31. Profit/Loss from Discontinued Operations
32. Net Income
33. Change in Value of AFS Investments
34. Revaluation of Fixed Assets
35. Currency Translation Differences
36. Remaining OCI Gains/(losses)
37. Fitch Comprehensive Income
38. Memo: Profit Allocation to Non-controlling Interests
39. Memo: Net Income after Allocation to Non-controlling Interests
40. Memo: Common Dividends Relating to the Period
41. Memo: Preferred Dividends Related to the Period
Exchange rate
OJSC Alfa-Bank
August 2013
2,818.0
292.0
0.0
3,110.0
630.0
802.0
1,432.0
1,678.0
(36.0)
(5.0)
(3.0)
n.a.
580.0
32.0
568.0
630.0
409.0
1,039.0
n.a.
1,207.0
95.0
43.0
1,069.0
n.a.
n.a.
n.a.
n.a.
n.a.
1,069.0
240.0
n.a.
829.0
84.0
0.0
13.0
(1.0)
925.0
0.0
829.0
182.0
n.a.
31 Dec 2012
Year End
USDm
Unqualified
2,818.0
292.0
0.0
3,110.0
630.0
802.0
1,432.0
1,678.0
(36.0)
(5.0)
(3.0)
n.a.
580.0
32.0
568.0
630.0
409.0
1,039.0
n.a.
1,207.0
95.0
43.0
1,069.0
n.a.
n.a.
n.a.
n.a.
n.a.
1,069.0
240.0
n.a.
829.0
84.0
0.0
13.0
(1.0)
925.0
0.0
829.0
182.0
n.a.
USD1 = USD1.00000
As % of
Earning Assets
7.19
0.74
0.00
7.93
1.61
2.04
3.65
4.28
(0.09)
(0.01)
(0.01)
1.48
0.08
1.45
1.61
1.04
2.65
3.08
0.24
0.11
2.73
2.73
0.61
2.11
0.21
0.00
0.03
(0.00)
2.36
0.00
2.11
0.46
-
31 Dec 2011
Year End
As % of
USDm
Earning
Unqualified
Assets
2,264.0
361.0
1.0
2,626.0
545.0
666.0
1,211.0
1,415.0
(54.0)
0.0
49.0
n.a.
455.0
28.0
478.0
556.0
421.0
977.0
n.a.
916.0
148.0
6.0
762.0
n.a.
n.a.
n.a.
n.a.
n.a.
762.0
121.0
n.a.
641.0
(73.0)
(2.0)
(85.0)
3.0
484.0
0.0
641.0
131.0
n.a.
8.25
1.32
0.00
9.57
1.99
2.43
4.42
5.16
(0.20)
0.00
0.18
1.66
0.10
1.74
2.03
1.53
3.56
3.34
0.54
0.02
2.78
2.78
0.44
2.34
(0.27)
(0.01)
(0.31)
0.01
1.76
0.00
2.34
0.48
-
USD1 = USD1.00000
31 Dec 2010
Year End
As % of
USDm
Earning
Unqualified
Assets
1,952.0
368.0
1.0
2,321.0
507.0
506.0
1,013.0
1,308.0
112.0
(5.0)
87.0
n.a.
317.0
81.0
592.0
488.0
354.0
842.0
n.a.
1,058.0
370.0
(12.0)
700.0
n.a.
n.a.
n.a.
n.a.
n.a.
700.0
147.0
n.a.
553.0
52.0
4.0
(27.0)
(51.0)
531.0
3.0
550.0
150.0
0.0
8.10
1.53
0.00
9.63
2.10
2.10
4.20
5.43
0.46
(0.02)
0.36
1.32
0.34
2.46
2.02
1.47
3.49
4.39
1.54
(0.05)
2.90
2.90
0.61
2.29
0.22
0.02
(0.11)
(0.21)
2.20
0.01
2.28
0.62
0.00
USD1 = USD1.00000
31 Dec 2009
Year End
As % of
USDm
Earning
Unqualified
Assets
1,683.0
836.0
1.0
2,520.0
427.0
1,017.0
1,444.0
1,076.0
4.0
49.0
(3.0)
n.a.
255.0
79.0
384.0
393.0
354.0
747.0
n.a.
713.0
589.0
(5.0)
129.0
n.a.
n.a.
5.0
n.a.
n.a.
124.0
47.0
n.a.
77.0
85.0
(19.0)
55.0
18.0
216.0
(11.0)
88.0
0.0
0.0
9.02
4.48
0.01
13.50
2.29
5.45
7.74
5.77
0.02
0.26
(0.02)
1.37
0.42
2.06
2.11
1.90
4.00
3.82
3.16
(0.03)
0.69
0.03
0.66
0.25
0.41
0.46
(0.10)
0.29
0.10
1.16
(0.06)
0.47
0.00
0.00
USD1 = USD1.00000
18
Banks
ABH Financial Limited
Balance Sheet
Year End
USDm
31 Dec 2012
Year End
USDm
As % of
Assets
31 Dec 2011
Year End
As % of
USDm
Assets
31 Dec 2010
Year End
As % of
USDm
Assets
31 Dec 2009
Year End
As % of
USDm
Assets
295.0
n.a.
4,353.0
27,177.0
n.a.
1,261.0
30,564.0
31,825.0
345.0
n.a.
295.0
n.a.
4,353.0
27,177.0
n.a.
1,261.0
30,564.0
31,825.0
345.0
n.a.
0.64
9.48
59.17
2.75
66.54
69.29
0.75
-
321.0
n.a.
2,434.0
20,417.0
n.a.
1,368.0
21,804.0
23,172.0
333.0
n.a.
1.02
7.76
65.09
4.36
69.52
73.88
1.06
-
355.0
n.a.
1,931.0
15,889.0
n.a.
1,380.0
16,795.0
18,175.0
672.0
n.a.
1.25
6.78
55.79
4.85
58.98
63.82
2.36
-
428.0
n.a.
1,676.0
12,849.0
n.a.
1,504.0
13,449.0
14,953.0
1,949.0
n.a.
1.98
7.74
59.36
6.95
62.13
69.08
9.00
-
3,083.0
215.0
2,967.0
427.0
1,782.0
77.0
104.0
n.a.
5,572.0
1,476.0
n.a.
n.a.
n.a.
n.a.
39,219.0
3,083.0
215.0
2,967.0
427.0
1,782.0
77.0
104.0
n.a.
5,572.0
1,476.0
n.a.
n.a.
n.a.
n.a.
39,219.0
6.71
0.47
6.46
0.93
3.88
0.17
0.23
12.13
3.21
85.38
1,578.0
664.0
1,774.0
226.0
1,166.0
117.0
98.0
n.a.
4,045.0
1,063.0
n.a.
n.a.
n.a.
n.a.
27,427.0
5.03
2.12
5.66
0.72
3.72
0.37
0.31
12.90
3.39
87.44
2,605.0
149.0
2,340.0
106.0
1,351.0
324.0
97.0
336.0
4,703.0
1,480.0
n.a.
n.a.
n.a.
n.a.
24,103.0
9.15
0.52
8.22
0.37
4.74
1.14
0.34
1.18
16.51
5.20
84.64
2,270.0
n.a.
1,372.0
63.0
1,009.0
n.a.
85.0
414.0
2,943.0
684.0
n.a.
n.a.
n.a.
n.a.
18,662.0
10.49
6.34
0.29
4.66
0.39
1.91
13.60
3.16
86.21
5,662.0
444.0
n.a.
559.0
64.0
43.0
29.0
0.0
n.a.
356.0
45,932.0
5,662.0
444.0
n.a.
559.0
64.0
43.0
29.0
0.0
n.a.
356.0
45,932.0
12.33
0.97
1.22
0.14
0.09
0.06
0.00
0.78
100.00
3,023.0
316.0
n.a.
340.0
60.0
34.0
29.0
4.0
n.a.
448.0
31,365.0
9.64
1.01
1.08
0.19
0.11
0.09
0.01
1.43
100.00
3,371.0
189.0
n.a.
304.0
64.0
23.0
96.0
45.0
n.a.
472.0
28,478.0
11.84
0.66
1.07
0.22
0.08
0.34
0.16
1.66
100.00
2,116.0
150.0
n.a.
366.0
64.0
21.0
19.0
37.0
n.a.
361.0
21,646.0
9.78
0.69
1.69
0.30
0.10
0.09
0.17
1.67
100.00
10,500.0
n.a.
16,342.0
26,842.0
3,630.0
1,872.0
2,694.0
35,038.0
3,380.0
2,170.0
n.a.
5,550.0
450.0
n.a.
41,038.0
10,500.0
n.a.
16,342.0
26,842.0
3,630.0
1,872.0
2,694.0
35,038.0
3,380.0
2,170.0
n.a.
5,550.0
450.0
n.a.
41,038.0
22.86
35.58
58.44
7.90
4.08
5.87
76.28
7.36
4.72
12.08
0.98
89.35
8,079.0
n.a.
10,175.0
18,254.0
1,595.0
789.0
n.a.
20,638.0
5,015.0
1,335.0
n.a.
6,350.0
344.0
n.a.
27,332.0
25.76
32.44
58.20
5.09
2.52
65.80
15.99
4.26
20.25
1.10
87.14
6,431.0
n.a.
10,381.0
16,812.0
1,371.0
726.0
n.a.
18,909.0
4,297.0
1,395.0
n.a.
5,692.0
163.0
n.a.
24,764.0
22.58
36.45
59.04
4.81
2.55
66.40
15.09
4.90
19.99
0.57
86.96
4,719.0
n.a.
8,967.0
13,686.0
1,108.0
n.a.
n.a.
14,794.0
1,860.0
1,747.0
n.a.
3,607.0
174.0
n.a.
18,575.0
21.80
41.43
63.23
5.12
68.35
8.59
8.07
16.66
0.80
85.81
n.a.
n.a.
185.0
32.0
90.0
n.a.
n.a.
n.a.
435.0
41,780.0
n.a.
n.a.
185.0
32.0
90.0
n.a.
n.a.
n.a.
435.0
41,780.0
0.40
0.07
0.20
0.95
90.96
n.a.
n.a.
150.0
64.0
56.0
n.a.
n.a.
n.a.
328.0
27,930.0
0.48
0.20
0.18
1.05
89.05
n.a.
n.a.
149.0
28.0
139.0
n.a.
n.a.
n.a.
319.0
25,399.0
0.52
0.10
0.49
1.12
89.19
n.a.
n.a.
118.0
18.0
102.0
n.a.
n.a.
n.a.
135.0
18,948.0
0.55
0.08
0.47
0.62
87.54
0.0
0.0
0.0
0.0
0.00
0.00
0.0
0.0
0.00
0.00
0.0
0.0
0.00
0.00
0.0
0.0
0.00
0.00
4,461.0
1.0
68.0
(403.0)
25.0
4,152.0
45,932.0
3,913.0
n.a.
4,461.0
1.0
68.0
(403.0)
25.0
4,152.0
45,932.0
3,913.0
n.a.
9.71
0.00
0.15
(0.88)
0.05
9.04
100.00
8.52
-
3,837.0
1.0
(15.0)
(416.0)
28.0
3,435.0
31,365.0
2,814.0
n.a.
12.23
0.00
(0.05)
(1.33)
0.09
10.95
100.00
8.97
-
3,325.0
n.a.
55.0
(331.0)
30.0
3,079.0
28,478.0
2,479.0
n.a.
11.68
0.19
(1.16)
0.11
10.81
100.00
8.70
-
2,912.0
3.0
54.0
(304.0)
33.0
2,698.0
21,646.0
2,162.0
n.a.
13.45
0.01
0.25
(1.40)
0.15
12.46
100.00
9.99
-
Assets
A. Loans
1. Residential Mortgage Loans
2. Other Mortgage Loans
3. Other Consumer/ Retail Loans
4. Corporate & Commercial Loans
5. Other Loans
6. Less: Reserves for Impaired Loans/ NPLs
7. Net Loans
8. Gross Loans
9. Memo: Impaired Loans included above
10. Memo: Loans at Fair Value included above
B. Other Earning Assets
1. Loans and Advances to Banks
2. Reverse Repos and Cash Collateral
3. Trading Securities and at FV through Income
4. Derivatives
5. Available for Sale Securities
6. Held to Maturity Securities
7. At-equity Investments in Associates
8. Other Securities
9. Total Securities
10. Memo: Government Securities included Above
11. Memo: Total Securities Pledged
12. Investments in Property
13. Insurance Assets
14. Other Earning Assets
15. Total Earning Assets
C. Non-Earning Assets
1. Cash and Due From Banks
2. Memo: Mandatory Reserves included above
3. Foreclosed Real Estate
4. Fixed Assets
5. Goodwill
6. Other Intangibles
7. Current Tax Assets
8. Deferred Tax Assets
9. Discontinued Operations
10. Other Assets
11. Total Assets
Liabilities and Equity
D. Interest-Bearing Liabilities
1. Customer Deposits - Current
2. Customer Deposits - Savings
3. Customer Deposits - Term
4. Total Customer Deposits
5. Deposits from Banks
6. Repos and Cash Collateral
7. Other Deposits and Short-term Borrowings
8. Total Deposits, Money Market and Short-term Funding
9. Senior Debt Maturing after 1 Year
10. Subordinated Borrowing
11. Other Funding
12. Total Long Term Funding
13. Derivatives
14. Trading Liabilities
15. Total Funding
E. Non-Interest Bearing Liabilities
1. Fair Value Portion of Debt
2. Credit impairment reserves
3. Reserves for Pensions and Other
4. Current Tax Liabilities
5. Deferred Tax Liabilities
6. Other Deferred Liabilities
7. Discontinued Operations
8. Insurance Liabilities
9. Other Liabilities
10. Total Liabilities
F. Hybrid Capital
1. Pref. Shares and Hybrid Capital accounted for as Debt
2. Pref. Shares and Hybrid Capital accounted for as Equity
G. Equity
1. Common Equity
2. Non-controlling Interest
3. Securities Revaluation Reserves
4. Foreign Exchange Revaluation Reserves
5. Fixed Asset Revaluations and Other Accumulated OCI
6. Total Equity
7. Total Liabilities and Equity
8. Memo: Fitch Core Capital
9. Memo: Fitch Eligible Capital
Exchange rate
OJSC Alfa-Bank
August 2013
USD1 = USD1.00000
USD1 = USD1.00000
USD1 = USD1.00000
USD1 = USD1.00000
19
Banks
ABH Financial Limited
Summary Analytics
A. Interest Ratios
1. Interest Income on Loans/ Average Gross Loans
2. Interest Expense on Customer Deposits/ Average Customer Deposits
3. Interest Income/ Average Earning Assets
4. Interest Expense/ Average Interest-bearing Liabilities
5. Net Interest Income/ Average Earning Assets
6. Net Int. Inc Less Loan Impairment Charges/ Av. Earning Assets
7. Net Interest Inc Less Preferred Stock Dividend/ Average Earning Assets
B. Other Operating Profitability Ratios
1. Non-Interest Income/ Gross Revenues
2. Non-Interest Expense/ Gross Revenues
3. Non-Interest Expense/ Average Assets
4. Pre-impairment Op. Profit/ Average Equity
5. Pre-impairment Op. Profit/ Average Total Assets
6. Loans and securities impairment charges/ Pre-impairment Op. Profit
7. Operating Profit/ Average Equity
8. Operating Profit/ Average Total Assets
9. Taxes/ Pre-tax Profit
10. Pre-Impairment Operating Profit / Risk Weighted Assets
11. Operating Profit / Risk Weighted Assets
C. Other Profitability Ratios
1. Net Income/ Average Total Equity
2. Net Income/ Average Total Assets
3. Fitch Comprehensive Income/ Average Total Equity
4. Fitch Comprehensive Income/ Average Total Assets
5. Net Income/ Av. Total Assets plus Av. Managed Securitized Assets
6. Net Income/ Risk Weighted Assets
7. Fitch Comprehensive Income/ Risk Weighted Assets
D. Capitalization
1. Fitch Core Capital/Weighted Risks
2. Fitch Eligible Capital/ Weighted Risks
3. Tangible Common Equity/ Tangible Assets
4. Tier 1 Regulatory Capital Ratio
5. Total Regulatory Capital Ratio
6. Core Tier 1 Regulatory Capital Ratio
7. Equity/ Total Assets
8. Dividends Paid & Declared/ Net Income
9. Dividend Paid & Declared/ Fitch Comprehensive Income
10. Cash Dividends & Share Repurchase/Net Income
11. Net Income - Cash Dividends/ Total Equity
E. Loan Quality
1. Growth of Total Assets
2. Growth of Gross Loans
3. Impaired Loans(NPLs)/ Gross Loans
4. Reserves for Impaired Loans/ Gross loans
5. Reserves for Impaired Loans/ Impaired Loans
6. Impaired Loans less Reserves for Imp Loans/ Equity
7. Loan Impairment Charges/ Average Gross Loans
8. Net Charge-offs/ Average Gross Loans
9. Impaired Loans + Foreclosed Assets/ Gross Loans + Foreclosed Assets
F. Funding
1. Loans/ Customer Deposits
2. Interbank Assets/ Interbank Liabilities
3. Customer Deposits/ Total Funding excl Derivatives
OJSC Alfa-Bank
August 2013
31 Dec 2012
Year End
31 Dec 2011
Year End
31 Dec 2010
Year End
31 Dec 2009
Year End
11.20
2.94
9.72
4.41
5.25
4.95
5.25
11.19
3.04
9.98
4.57
5.38
4.81
5.38
12.27
3.50
11.27
4.85
6.35
4.55
6.35
10.26
3.30
12.63
6.86
5.39
2.44
5.39
25.29
46.26
2.80
31.53
3.26
11.43
27.92
2.89
22.45
3.10
2.74
25.25
51.61
3.21
27.49
3.01
16.81
22.87
2.50
15.88
3.25
2.70
31.16
44.32
3.47
36.65
4.37
33.84
24.25
2.89
21.00
4.56
3.02
26.30
51.16
3.13
28.98
2.98
81.91
5.24
0.54
37.90
3.68
0.67
21.65
2.24
24.16
2.50
n.a.
2.13
2.37
19.24
2.11
14.53
1.59
n.a.
2.27
1.72
19.16
2.28
18.39
2.19
n.a.
2.39
2.29
3.13
0.32
8.78
0.90
n.a.
0.40
1.11
10.03
n.a.
8.83
10.20
15.60
n.a.
9.04
21.95
19.68
n.a.
15.58
9.97
n.a.
10.67
11.90
16.70
n.a.
10.95
20.44
27.07
n.a.
14.85
10.69
n.a.
10.40
12.60
18.20
n.a.
10.81
27.12
28.25
n.a.
13.09
11.16
n.a.
11.97
13.10
20.00
n.a.
12.46
0.00
0.00
n.a.
2.85
46.44
38.42
1.13
4.13
365.51
(22.06)
0.38
1.16
1.13
10.14
23.18
1.51
6.20
410.81
(30.13)
0.73
0.78
1.51
31.56
20.39
3.75
7.71
205.36
(22.99)
2.33
3.28
3.75
(19.98)
(22.28)
13.11
10.12
77.17
16.49
3.59
1.68
13.11
113.69
84.93
66.13
120.78
98.93
67.64
106.46
190.01
68.34
108.63
204.87
74.38
20
Banks
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OJSC Alfa-Bank
August 2013
21