Credit Agricole Bank achieved a Net Result of UAH 306 million in Q1-17, an increase by UAH 182 million or +147% as compared to Q1-16

28 April 2017

Credit Agricole Bank to reinforce its equity by UAH 485 million through the increase of its reserves.

«The first quarter of 2017 confirms the ability of Credit Agricole Bank to generate high profits in a normalizing environment. The bank ends Q1-17 with its best quarterly net result ever realized and this for the fourth quarter in a row. Low natural Cost of Risk and good recovery results resulted in the lowest level of risk charges since Q3-13», - commented on Régis Lefèvre, Member of the Management Board, Financial Director of Credit Agricole Bank.

Credit Agricole Bank reached in Q1-17 its record net result per quarter of UAH 306 million, showing an increase by UAH +182 million or +147% as compared to Q1-16.

This result was achieved through a decrease of risk charges, offsetting the effects of declining short-term interest rates, increased competition and normalizing FX market.

Credit Agricole Bank’s Net banking Income (NBI) decreased by UAH -57 million in Q1-17 as compared to Q1-16 (-8%) on declining short-term interest rates and narrowing FX spreads. The cost of risk decreased from its high levels of Q1-16 by -88% or by UAH 301 million, which confirms overall improvement of the economic situation in Ukraine as well as the quality of Credit Agricole Bank risk monitoring policy.

Credit Agricole Bank keeps diversifying its loan book and contributing to the Ukrainian economy by attracting new Corporate customers and servicing Private individuals.

The bank continues to demonstrate strong capital position with a capital adequacy ratio (N2) of 18.88% as of the end of March 2017. Such a level of profitability allows the bank both to distribute dividends to its shareholders and to reinforce its equity through the increase of reserves. The General Shareholders meeting of 27 April 2017 decided to distribute UAH 318 million of 2016 profit and to increase the equity of the bank by UAH 485 million through the increase of reserves.

Short overview of Credit Agricole Bank’s Income Statement:

Net Banking Income (NBI) for the three months of 2017 amounted to UAH 673 million (-8% vs Q4-16). Decreases of Interest rate and FX spreads were partially balanced by higher commercial volumes demonstrating the dynamism of commercial activity.
Net Interest Income (NII) decreased by -2% vs Q4-16, or by UAH 9 million on overall shirking trend of interest rate spreads and tougher competition.
Net Commissions increased by UAH +27 million compared to Q1-16, or by +21%, on higher services, currency market transactions and insurance services. Share of commissions in NBI has increased by 550 basis points vs Q1-16 from 17.5% to 23.0%. Such increase confirms ability of the bank to diversify its sources of revenues in a context of interest rate decrease.
Other NBI decreased by UAH -36 million or by -37% vs Q4-16 following stabilization on FX market.
Operating expenses increased by +18% (or by UAH 39 million) vs Q1-16 on higher staff charges (+24% or UAH 30 million) and other expenses (+10% or UAH 9 million). Credit Agricole Bank is investing in new projects, among which are digitalization and transformation initiatives.
Decrease in Cost of risk (UAH -301 million or -88% in Q1-17 vs Q1-16) reflects improvement of the environment. Nevertheless, Credit Agricole Bank maintains its conservative provisioning policy, reflected by the increase YTD of the coverage ratio of non-performing credit exposure since December 2016, from 81% to 82%.

Other significant information on Credit Agricole Bank’s financials:

Total assets increased by UAH +1.0 billion YTD to UAH 30.9 billion, which reflects the continuous increase of Credit Agricole Bank business volumes and further improvement and strengthening of the liquidity position.
Cash and cash equivalents slightly decreased by UAH -0.3 billion YTD, but remains at a high level. Credit Agricole Bank has a strong liquidity position and does not need any external funding.
Gross Loans and advances to customers decreased by -1%. Gross Loans to corporate customers decreased by -1% during Q1-17, while loans to Private individuals slightly increased by +1%. Decrease of loans in Q1-17 does not in fact reflect the reality of the activity but rather reveals the efforts to clean up the balance sheets (sales and write offs). Non-performing loan ratio decreased by 2.7% YTD and credit provisions decreased by 10% YTD. In fact, commercial volumes are on increasing trend, both on Legal entities and Private individuals.
Customer deposits increased by +4% mainly on Corporate side (by +6%).

Short Quarterly Income Statement

(in UAH million)

Item	Q1-16	Q4-16	Q1-17	Q1-17 vs Q4-16		Q1-17 vs Q1-16
Net Banking Income	730	735	673	-62	-8%	-57	-8%
NII	512	465	457	-9	-2%	-55	-11%
Commissions	128	172	155	-17	-10%	27	21%
Other NBI	91	98	62	-36	-37%	-29	-32%
Operating Expenses	-221	-312	-260	52	-17%	-39	18%
Staff charges	-125	-170	-155	14	-9%	-30	24%
Other expenses	-96	-142	-105	37	-26%	-9	10%
Gross Operating Income	509	424	413	-11	-3%	-96	-19%
Cost of Risk	-343	-121	-42	79	-65%	301	-88%
Result before taxes	166	303	371	69	23%	205	124%
Taxes	-42	-56	-66	-10	17%	-24	56%
Net Result	124	247	306	59	24%	182	147%

Short Balance Sheet

(in UAH million)

Item	Mar-16	Dec-16	Mar-17	Mar-17 vs Dec-16		Mar-17 vs Mar-16
Assets
Cash and cash equivalents	9 594	10 538	10 212	-325	-3%	618	6%
Due from other banks and the NBU	2 819	2 604	3 606	1 002	38%	787	28%
Gross Loans and advances to customers	17 874	19 041	18 930	-111	-1%	1 056	6%
Corporate loans	16 238	16 851	16 715	-137	-1%	476	3%
Private individuals loans	1 636	2 190	2 215	26	1%	580	35%
Provisions	-3 277	-3 536	-3 181	355	-10%	97	-3%
Other assets	595	1 249	1 368	120	10%	774	130%
Total assets	27 605	29 895	30 936	1 040	3%	3 331	12%
Liabilities
Due to other banks	544	392	268	-124	-32%	-276	-51%
Customer deposits	23 174	25 210	26 095	884	4%	2 921	13%
Corporate deposits	17 363	19 045	20 125	1 080	6%	2 761	16%
Private individuals deposits	5 810	6 166	5 970	-195	-3%	160	3%
Other liabilities	357	448	427	-20	-5%	71	20%
Subordinated debt	1 324	1 370	1 364	-6	0%	40	3%
Total liabilities	25 398	27 420	28 154	735	3%	2 756	11%
Equity	2 206	2 476	2 781	306	12%	575	26%
Total equity and liabilities	27 605	29 895	30 936	1 040	3%	3 331	12%

Credit Agricole Bank’s Interim Financial Statements are elaborated according to IFRS. Additionally, the detailed quarterly financial statements will be published on the bank's website.

About Credit Agricole:

PJSC «CREDIT AGRICOLE BANK» is a modern universal bank owned by the leading financial group in Europe – Credit Agricole Group (France). The Group is a major partner of the French economy and one of the largest banking groups in Europe. It is a leading retail bank in Europe, having the largest portfolio of assets under management, being first in the field of bank insurance and third - in project financing in Europe. Credit Agricole has been operating in the financial market of Ukraine since 1993 and renders the entire range of banking services to private individuals, including VIP clients, and business. The Bank pays special attention to cooperation with agricultural enterprises. Reliability and business reputation of CREDIT AGRICOLE in Ukraine is confirmed by the highest possible FITCH ratings, leading positions in bank sustainability, bank deposit reliability and bank profitability rankings, as well as by 460 000 private and 26 000 corporate customers, including representatives of small and medium business, large Ukrainian companies and international corporations.

Contacts:

Viktoriia Torianyk, Head of PR and corporate communications Credit Agricole Bank.

Phone: +38 044 581 07 45, e-mail: Viktoriia.Torianyk@credit-agricole.ua

Credit Agricole has signed the Charter on Financial Inclusion and Reintegration of Veterans