"Credit Agricole Bank has completed the first half-year with a very high net result of 571 MUAH. If this increase of net result is due to a decrease of cost of risk, I would like to stress that the good resistance of Net Banking Income reflects the ability of Credit Agricole Bank to diversify its revenues and to increase its lending to Ukrainian economy"
Régis Lefèvre, Member of the Management Board, Financial Director of Credit Agricole Bank commented.
This result has been achieved through a diversification of its sources of revenues and a reduction of Cost of Risk. NBI decreased by 85 MUAH or -6% H1 2017 vs H1 2016 due to decreasing of IRs and FX spreads. Decrease of NBI was offset by an improvement of cost of risk that decreased by -81% or 440 MUAH in comparison with the first six months of 2016. This confirms continuation of the improvement of the economic situation in Ukraine and the quality of credit risk monitoring system of Credit Agricole Bank.
Credit Agricole Bank continues to diversify its loan portfolio and invest in the Ukrainian economy by attracting new clients from the corporate, SME and private sectors. Loan portfolio increased by +10% or by 1.7 billion UAH. If loans to legal entities increased by +5%, loans to private individuals increased by +49% as compared to the same period of last year, evidencing the will of CAU to restart its lending to Ukrainian economy.
Customer deposits increased by +5% or by 1.3 billion UAH. Deposits of legal entities increased by +5% and individuals by +6%.
Bank demonstrates the ability to generate healthy assets and diversify its revenues based on sufficient liquidity and capital (capital adequacy ratio H2 is 16.94% after dividend payment from 2016 profit).
Short overview of Credit Agricole Bank’s Income Statement:
- Net Banking Income (NBI) for the six months of 2017 amounted to 1.3 billion UAH (-6% vs H1 2016). Decrease in interest income and of revenues on Forex spreads is partially offset by an increase in commission income.
- Net Interest Income (NII) decreased by -3% in comparison with the same period in 2016 due to lower interest rates (on customer loans and NBU certificates of deposit), reflecting a decrease in the NBU key rate and increased competition. However, it should be noted that the increase on outstanding loans allowed CAU to limit the impact of lower interest rate.
- Net Commissions increased by 52 MUAH or by +19% over the six months of 2017 compared to the first half of 2016 due to fees for cash and settlement services, trade finance and insurance services increased.
- Other NBI decreased by 106 MUAH or -51% over the six months of 2017 compared to six months in 2016, mainly due to lower volatility and the stabilization of the foreign exchange market, which in turn led to a reduction of FX spreads.
- Operating expenses increased by +14% or 63 MUAH compared to the first semester of 2016. Staff costs increased by 43 MUAH or +17%. Growth of other expenses of 20 MUAH or +10% was mainly due to an increase in depreciation, reflecting investments into transformation processes and digital projects.
- Decrease in Cost of risk by 440 MUAH or -81% in H1-17 vs H1-16 reflects a global improvement of the environment and better management of bad debts. Nevertheless, Credit Agricole Bank maintained its cautious provisioning policy, reflected by the increase YTD of the coverage ratio of non-performing credit exposure by 300 basis points since Dec-16, from 81% to 84%.
Other significant information on Credit Agricole Bank’s financials:
- Total assets increased by 1.4 billion UAH in comparison with the same period last year to 29.1 billion UAH, which indicates a steady development of business volumes and further improvement and strengthen liquidity position.
- Cash and cash equivalents decreased by 1.3 billion UAH up to 9.2 billion UAH as result of reallocation of extra liquidity in to more profitable assets: NBU certificates of deposit, government bonds and customers loans. Credit Agricole Bank has a strong liquidity position and does not need any external funding.
- Gross Loans and advances to customers increased by 10%. Loans granted to legal entities grew by +5% compared to the same period last year, while loans to individuals increased by +49%.
- Customer deposits increased by +5% mainly on Corporate side.
- Capital adequacy ratio H2 is 16.94% (mandatory level is 10%)
ShortSemi-annual Income Statement
|Cashand cash equivalents|
|Duefrom other banks and the NBU|
|GrossLoans and advances to customers|
|Dueto other banks|
Totalequity and liabilities