AK BARS Bank: Key Investment Highlights

Transcription

1 AK BARS Bank: Key Investment Highlights September,

2 Content AK BARS Bank At Glance 3 Macroeconomic Overview of Russia and Tatarstan 6 Bank`s Activity 10 Key Highlights 15 Business Lines 21 Innovations 29 Bank`s Strategy 32 Appendix 35 2

3 AK BARS Bank at Glance 3

4 Key Highlights 1 2 Bank 1 in the Republic of Tatarstan TOP 20 Russian banks 8 Worldwide correspondent network Strong relationships with the Government of Tatarstan 3 Stable track record of banking innovations Shareholders aimed at the Bank`s development and growth 7 Experienced team Effective corporate governance

5 Rankings & International credit ratings by assets (1) by equity (1) by distribution network in Russia with 12 branches and 252 other offices (2) among the Internet Banking Rank 2016 (3) in Sustainability rating among the TOP 100 Russian Banks 2017 (4) AK BARS Persona - Best Regional Bank in Private Banking 2017 in Russia according to Frank Research Group Moody`s Investors Service B2 (Stable) (1) As of 1 July according to Profile magazine (dated 23 August, 2017) (2) Comparison composed by AK BARS Bank, as of 1 September, 2017, excluding Sberbank network (3) According to Markswebb Rank & Report (4) According to Forbes as of

6 Macroeconomic overview of Russia and Tatarstan 6

7 Macroeconomic Situation - Russia GDP dynamics Real Disposable income and Consumer price index 6,0% 4,0% 2,0% 0,0% -2,0% -4,0% -6,0% -8,0% -10,0% 4,5% 4,3% 3,7% 1,8% 1,5% 0,7% H ,2% -2,8% GDP growth, % YoY -7,8% 15,0% 10,0% 5,0% 0,0% -5,0% -10,0% 12,9% 11,4% 8,8% 8,8% 6,1% 6,6% 6,5% 5,4% 5,9% 3,0% 0,5% 4,6% 4,0% 2,4% H ,7% -3,2% -1,4% Real disposable income -5,9% Inflation YoY The RUB against the US dollar and oil prices for Urals Investments in fixed capital H 2017 The US dollar average, rubles per US dollar US/barrel world oil price, Urals USD 15,0% 10,0% 5,0% 0,0% -5,0% -10,0% -15,0% 10,8% 4,8% 6,30% 6,80% 0,8% H ,5% -0,9% -10,10% -13,50% Investment in fixed capital Source: Federal State Statistics Service, CBR, Ministry of Finance 7

8 Macroeconomic Situation - Russia Dynamics of Public debt (% of GDP) Dynamics of the Current account and Capital outflow 60% 50% 40% 30% 20% 150,0 100,0 50,0 0,0-50,0-100,0 97,3 50,4 67,5 71,3 68,8 57,5 33,4 25,5 21, H ,8-57,5-58,1-13,1 10% 0% -150,0-200,0 US Current Account, USD bln. -152,1 US Capital Outflows, USD bln. International reserves (bln. USD). External debt repayment of banks and corporate sector Debt as of April 1, US $ 465 bln. 550,0 530,0 35,0 510,0 490,0 470,0 450,0 430,0 410,0 390,0 370,0 350,0 30,0 25,0 20,0 15,0 10,0 5,0 0,0 20,5 25,0 27,8 16,0 13,3 15,8 11,4 9,4 10,5 4,5 6,5 5,2 6,9 6,9 3,8 2,4 2 q q q q q q q q 2019 Banks, USD bln. Corporate sector, USD bln. Source: CBR, Ministry of Finance 8

9 Agriculture Manufacturin g Mining Processing Production and distribution of electricity, Construction Freightturnov er Retail Business Paid services for public Macroeconomic Situation - Tatarstan The Republic of Tatarstan ranked first within the national rating of investment climate among constituents of the Russian Federation in 2016 and 2017*. GRP growth Real Disposable income and Consumer price index 8,0% 6,0% 4,0% 2,0% 0,0% -2,0% -4,0% 5,7% 5,5% 4,3% 4,0% 2,4% 2,1% 2,5% 0,0% М 2017 GRP Growth, % YoY -3,4% 20,0% 15,0% 10,0% 5,0% 0,0% -5,0% -10,0% 7,5% 8,2% 9,7% 10,7% 6,3% 5,9% 6,4% 2,4% 9,0% 1,8% 14,2% 2,5% 6,7% 3,9% 2,0% H ,0% -2,6% -4,8% Real disposable income Inflation YoY Investments in Fixed capital Dynamics of basic economic activities 15,0% 13,6% 10,0% 9,9% 10,1% 5,0% 0,0% -5,0% -10,0% 6,2% 0,0% 0,0% 0,0% Q ,3% Investments in fixed capital -4,70% 9,2% 4,6% 0,0% -4,6% 5,0% 0,2% 3,5% 3,4% 4,3% 4,1% 3,7% 2,5% 2,5% 8,4% 2,6% 1,1% 2,3% -0,1% 2016 to 2015, % 1H ,2% -2,0% -2,0% -1,6% Source: Federal State Statistics Service, Ministry of economics of RT *According to the Agency of strategic initiatives of Russian Federation 9

10 The Bank`s Activity Experience Confidence Innovations 10

11 Key Milestones The Bank is established by the Government of Tatarstan Fitch Ratings assigns international ratings, including a long-term rating В- The Bank raises its first international syndicated loan Moody s Investors Service assigns international ratings to AK BARS Bank, including a longterm Ва3 The Bank issues its first Eurobond and raises another international syndicated loan Fitch Ratings upgrades rating to BB- (Stable) Moody s upgrades rating to Ba2 (Stable) The Bank issues a Eurobond in the amount of USD 250mln The Bank is ranked 16 th among largest Russian mortgage banks The Bank pays back a syndicate loan in the amount of USD 200mln Share capital increase of USD 300m to USD 932mln In December the Bank issues a Eurobond in the amount of USD 280mln The Bank successfully closes the first syndicated Murabaha financing contract in the CIS in the amount of USD 60mln AK BARS Bank acquires status of General Partner of Universiade 2013 in Kazan AK BARS Bank issues bonds in total amount of RUB 10bn Becomes Strategic Partner of SEZ «Innopolis» The Bank closes second syndicated Murabaha deal in an amount of USD 100mln The Bank receives the status of a Participating Financial Institution in accordance with FATCA The Bank closes its debut RUB 2.5bn mortgage portfolio securitization deal The Bank issues RUB 5 bn. bonds Cabinet of Ministers of Tatarstan singles out the Bank as the authorised bank of the Government Branches open outside Tatarstan The Bank issues rouble bonds and raises two international syndicated loans Share capital increases to USD 886mln Fitch Ratings upgrades rating to BB (Stable) The Bank raises international syndicated loan The Bank repays syndicated loans in the amount of USD 285mln The Bank redeems a Eurobond issue in the amount of USD 176mln Resumes loan disbursement under government program of concessional auto lending The Bank issues the largest ever subordinated Eurobond in its history in the amount of USD 600mln The largest unsecured Eurobond issue in 2012 among CIS banking issuers with a «B-BB» rating category, USD 500mln AK BARS Bank closes US$350 mln. eurobond deal The Bank becomes the National Partner and the Official Bank of 16th FINA World Championships AK BARS Bank issues RUB 9.8 bln. additional funded by the Government of Tatarstan The Bank closes its RUB 11.2 bn mortgage portfolio securitization deal AK BARS DIGITAL TECHNOLOGIES laboratory launched 11

12 AK BARS Bank major bank of Tatarstan AK BARS Bank plays an important role in the implementation of Tatarstan s regional policy Reputational Importance Authorised agent of the government of the Republic of Tatarstan for servicing the budgetary accounts and implementation of the social policy of the Republic Business profile Top-20 largest financial institution in Russia Universal bank with one of the largest distribution networks Ultimately controlled by the Republic of Tatarstan 12

13 AK BARS Bank major bank of Tatarstan Principal shareholders Non-profit organization «Regionalnyi fond sotsialno-ekonomicheskogo razvitiya «TUGAN IL» «Еurobest» Ltd 1,458 PJSC «Nizhnekamskneftekhim» 0,039 Shareholders holding less than 1 percent of share capital «Sinek Investment & Development Limited» Company «IKS-LUCH» Ltd 5,414 5,262 3,598 20,41 State-owned housing stock under the President of the Republic of Tatarstan Non-Commercial Organization 6,406 Joint-Stock company «Companiya «Yul» 6,778 19,789 «OSMAND HOLDING LIMITED» Company 6,823 10,413 13,61 The Republic of Tatarstan, represented by the Ministry of Land and Property regulations of Tatarstan Public Joint Stock Company TATNEFT named after V.D. Shashin JSC "Svyazinvestneftehim" 13

14 AK BARS Bank At Glance Gross loan portfolio, 30 June 2017 Retail 29% RUB mln AK BARS Bank loan portfolio is diversified across the key sectors of Tatarstan s economy 36 largest clients account for 36,6% of total loan portfolio Corporate 71% Successful track record _6m Branches and other offices Corporate clients Retail clients, mln Основные показатели, % _6m Net loans / deposits Provisions / gross loans Overdue loans / gross loans Equity / assets Tier 1 capital ratio (1) Total capital ratio (1) (1) In 2015 Bank started calculating the capital adequacy in accordance with the requirements of the Basel Committee on Banking Supervision - Basel III 14

15 Key Indicators 15

16 Asset Base Asset Structure (RUB bln.) 433,3 443,0 403,4 393,9 317,4 347,1 204,2 223,8 274,9 252,4 212,3 209,5 111,1 114,1 106,8 26,5 68,7 53,3 39,4 30,3 36,0 41,4 34,6 28,1 11,9 10,0 14,4 13,2 13,5 20,8 24,8 29,5 16,5 17,9 23,8 17,9 13,1 17,4 17,6 3,9 0,9 3, _6m Investment properties Loans to customers Due from other banks Securities portfolio Cash and cash equivalents Other assets Total assets During 1H of 2017, the Bank's assets decreased by 2,4 %, which is mainly due to a decrease in investments in securities by 6,4% while cash and cash equivalents grew by 18,8%, compared to Loans and advances to customers represent the largest part of assets (53,2%) Source: IFRS accounts 16

17 Loan Portfolio Corporate vs. Retail loans (%) Loans to individuals, (30 June 2017) 100,0% 81,5% 20% 23% 23% 23% 30% 29% 22,4% 2,0% 0,6% Plastic cards Car loans 63,0% 44,5% 80,0% 77,0% 77,0% 77,0% 70,0% 71,0% 75,0% Mortgage loans (include mortgage loans with a recourse feature) Consumer loans 26,0% 7,6% -10,9% _6m Loans to corporates Loans to individuals Loans to corporates, (30 June 2017) 0,3% Loans to state and public organisations 99,7% Corporate loans (incl. reverse sale and repurchase 17

18 Loan Portfolio Quality and Provisioning Overdue loans and provisions as % of total loans Structure of gross loan portfolio (30 June 2017) Overdue loans coverage, % largest clients with loan amounts more than RUB 1.2 bn.: 36,6% Other 63,4% 9,3% 7,2% 6,9% 8,6% 6,4% 5,5% 5,8% 10,1% 10,2% 3,9% 4,8% 3,0% 1,8% Overdue customer loans to total loans Provisions to total customer loans NPLs, over 90 days During 2016 share of the overdue loans changed insignificantly to 3,0% (5,8% in 2015) Provision coverage of overdue loans is at 344% The Bank s business is aiming to support and work closely with the Government of Tatarstan Republic and related parties(1). As of 30 June 2017: gross loans: RUB 42.0 bln (17.6% of total) customer accounts: RUB bln. (50.5 % of total) Source: IFRS accounts (1) Shareholders, other related parties (including associates, entities under control or significant influence of the management or shareholders), Tatarstan Republic Government bodies and state organisations 18

19 Adequate Capitalisation Levels CBR BASEL III CAPITAL (RAS) BASEL III CAPITAL (IFRS) * _6m Tier 1 (RUB bln.) 34,0 33,5 34,4 35,6 41,6 55, _6m Total (RUB bln.) 42,6 46,2 45,4 73,0 63,3 66,9 Total (RUB bln.) 50,8 50,2 47,7 59,3 70,4 71,1 15,4% 12,1% 14,0% 12,8% 11,9% 10,6% 2,9% 4,8% 13,1% 5,4% 12,7% 2,7% 13,6% 14,5% 11,2% 18,4% 14,0% 14,0% 7,7% 7,1% 7,7% 10,0% _6m N1.1 (CET1) / N1.2 (Tier 1) N1.0 / N1 (Total CAR) Tier 2 AK BARS Bank received RUB 12.1 bln. from Deposit Insurance Agency as a Tier-2 capital under government support program in June 2015 August 28, Bank placed additional issue of ordinary shares in the amount of RUB 9.8 bln. June 27, Bank placed additional issue of ordinary shares in the amount of RUB 10.0 bln _6m Total CAR * Until 2014 Bank calculated the capital adequacy in accordance with the requirements of the Basel Committee on Banking Supervision - Basel I 19

20 Sustainable Funding Model Focused on Deposits Liabilities composition (%) Customer accounts (%) 1% 1% 1% 1% 2% 1% 6% 6% 3% 3% 1% 5% 5% 9% 11% 3% 7% 3% 12% 15% 14% 15% 1% 18% 18% 3% 13% 9% 8% 12% 61% 64% 53% 59% 74% 82% 116% 37% 63% 110% 37% 63% 129% 28% 72% 105% 25% 75% 24% 80% 76% 20% 76% 80% _6m Customer accounts Due to other banks Debt securities issued Eurobonds Subordinated debt Other (1) _6m Term accounts Current accounts Loans/Deposits Borrowings maturity profile, 2016 (RUB bln.) Customer deposits maturity profile, 2016 (RUB bln.) 0,5 46,5 3,0 8,2 0,4 0,5 0,4 9,8 1,2 2,3 4,5 1 month 1-6 month 6-12 month 1-5 years 5 years Debt securities Eurobonds Subordinated debt Source: IFRS accounts (1) Includes deferred income tax liabilities, trade payables, fair value of derivative financial instruments and other liabilities 65,2 37,1 38,8 100,5 23,3 1 month 1-6 month 6-12 month 1-5 years 5 years 20

21 Business Lines 21

22 Business Lines Retail Business Retail business is the most dynamically growing segment around 3,4 mln. clients as of 30/06/2017. Corporate Business The Bank s largest business is corporate banking representing 33% of total revenues (1) Retail Lending Retail portfolio represents around 29% of the total loan portfolio (as of June 30, 2017) Predominantly focused on consumer and mortgages lending (include mortgage loans with a recourse feature) 75% and 22% of retail portfolio respectively Lending Business More than 83,000 customers Loans to corporate customers represent 71% of the Bank s total loans and advances to customers Deposits Offers a wide range of deposits tailored to serve targeted segments Deposits Corporate customer accounts represent 63% of total customer accounts State and public organizations are the largest depositors: 60% of total term deposits Principal member of the international MasterCard payment system and the VISA payment system As of there are more than 1,4 mln. operating plastic cards. Plastic Cards 904 ATMs, 357 information kiosks (as of 30 June, 2017) (1) Source: IFRS accounts as of

23 Retail Business Services to individuals Deposits Retail Lending Cards Money Transfer Brokerage Services Term deposits On Demand Current accounts Savings certificates Consumer Mortgage Car loans Debit Prepaid Credit Apple Pay Unistream Western Union Contact Golden Crown Trust management Online Trading Eurobond Purchase Roboadvising Distant Services AK BARS Online (Remote Banking) Mobile banking AK BARS Online 3.0. SMS-Banking Mobile app Information kiosks BankOk Services for non registered website visitors AK BARS 365 (Tours, Tickets, Travel insurance) p2p transfers for non-authorised users on bank website Remote products: Evolution card order, issue of approved loans Non-contact payments: Apple pay, Samsung pay, Android pay Online consultation with chat bot in AK BARS Online 3.0 mobile application Other Services Currency Exchange Payments acceptance Precious metals Safety deposit box Securities Post Bank Full Package Insurance Product Investment Life Insurance, Universal Life Insurance, Pension Saving Fund TaxFree4U Service Online Tax on Individual Person s Income Refund 23

24 Corporate business Corporate Banking Cash - settlement service Business Loans Online services Bank cards Accounts for residents Accounts for nonresidents Small business Medium and Large businesses Internet / Client-Bank Electronic account statement Phone Client Payroll Corporate cards Merchant acquiring Internet acquiring Money Placement International economic activity Bank guarantees Brokerage services Term deposit in rubles and foreign currency "Overnight Deposit On Demand deposits Accrual of interest on the minimum balance on the account. Settlement and cash services Documentary operations International guarantees Trade finance Conversion operations All types of guarantees Monetary funds allocation Currency operations Securities-backed financing Investment-analytical support 24

25 Correspondent Relations AK BARS Bank has an extensive correspondent network all over the world, enabling it to execute efficiently and professionally clearing, banknote, and documentary business transactions and other banking operations Correspondent bank Currency Correspondent bank Currency USA Japan JPMorgan Chase Bank NA USD The Bank of Tokyo-Mitsubishi UFJ Ltd. JPY Germany The United Kingdom Commerzbank AG EUR/GBP JPMorgan Chase Bank NA GBP J.P. Morgan AG EUR Switzerland VTB Bank (Deutschland) AG EUR UBS AG CHF Sweden Turkey SEB (Skandinaviska Enskilda Banken AB (Publ)) Austria SEK Turkiye Is Bankasi A.S. China Agricultural Bank of China Limited TRY CNY Raiffeisen Bank International AG EUR Republic of Belarus Belinvestbank JSC RUB 25

26 Investment Business Investment business represented by: AK BARS Bank Investment Company AK BARS Finance Management Company AK BARS CAPITAL АK BARS Bank AK BARS Finance Investment Company AK BARS CAPITAL Management Company Bloomberg BBG000PG2V69 Bloomberg BBG001BBN3T7 Bloomberg BBG004TTLGM3 AK BARS Bank uses a wide range of tools: structured finance, bills, trading, brokerage, bonds, Eurobonds and alternative finance. Information about the Bank and its public loans is available on the website of the Moscow Stock Exchange, Bloomberg and Reuters terminals. The Bank is a reliable borrower in the domestic debt market, and since an active participant in the international Eurobond market. 26

27 Signature Deals in DCM Murabaha USD 60 mln 1-year syndicated Murabaha financing Debut in Russia and CIS Awarded the title of «Deal of the Year 2011 in Europe» by IFN AK BARS Bank Eurobonds USD 500 mln The largest unsecured Eurobond issue in 2012 among CIS banking issuers with a «B-BB» rating category Murabaha USD 100 mln Awarded by special honorable prize by Islamic Finance News AK BARS Bank Eurobonds $ The Bank became the first Russian financial institution to issue a new benchmark international hard currency bond in Borrower 2011 Issuer 2012 Borrower 2013 Issuer 2015 Eurobonds outstanding Issue Issue amount, USD bln. Year Tenor LPN - Subordinated Loan (outstanding) LPN (outstanding) Domestic RUB bonds outstanding/mortgage loans AK BARS Bank Mortgage bonds RUB Securitization of mortgage portfolio 2016 Issue Issue amount, bln. Year Tenor ВО-04 (outstanding) MA AKBARS MA AKBARS AK BARS Bank: Key investment highlights May

28 Trade Finance AK BARS Bank is aiming to build long-term and trusting relationships with foreign financial institutions meeting both Bank`s and partners needs and economic efficiency. The Bank provides a wide range of services to meet the needs and economic interests of the partner banks and contractors. Mutually beneficial partnership enables banks to achieve not only their own goals, but also contributes to the development of their business clients. Major deals of the Bank for the past years: Received funding from its long-term partner- Raiffeisen Bank International AG (Austria) that provided the resources under the guarantee of the Austrian Export Credit Agency Oesterreichische Kontrollbank AG. Within the financing AK BARS Bank credited the purchase of industrial production from the Austrian company for the client. Provided financing to Belgazprombank under the export contract of bank`s client. Within the funding attracted, Belgazprombank credited the purchase of products from the Russian supplier by Belarusian importer for its own production. The transaction carried out with the participation of the Russian Agency for the Insurance of Export Credit and Investment (EXAR). Provided 1- year financing to Belarusbank under its client import contract with the Russian exporter. The funds are allocated by Belarusian Bank for the purchase of Russian-made equipment. From 2015 to 2017 the Bank acted as a creditor in syndicated loans attracted by Development Bank of the Republic of Belarus and Belagroprombank for trade financing purposes. In 2016 the Bank used the credit line opened by Citibank N.A., to provide funds for products purchase from Chinese suppliers for the Bank's client / Cheboksary branch. From 2016 to 2017 the Bank continues to collaborate with Belorussian banks within fixed limits and it consummates trade financing deals which are backed by contracts between Belorussian organizations and Russian suppliers. 28

29 Innovations 29

30 Current activity, Innovation and Change RUN CHANGE current activities implementation and changes implementation Product teams number and composition increase p/q in accordance with project scope AGILE First results: Significant reduction (2 times) in TIME TO MARKET 30

31 Laboratory of new digital banking products development AK BARS DIGITAL TECHNOLOGIES Laboratory of new digital banking products is designed to create unique banking solutions and services AIMS: Diversification: a new direction - digital business Building a financial supermarket Growth of transactional business Holding the current and the acquisition of a new customer base Center of own competencies in fintech Network optimization (channels) Development without physical presence Building the omni-channel 31

32 EXPERIENCE. CONFIDENCE. INNOVATIONS The Bank s Strategy 32

33 Business lines strategies Innovation model Clients relationship Bank`s Ecosystem - is a structure with its own expertise on the interaction with customers, business environment, as well as with advanced management model Management model Infrastructure Ecosystem Life-style partner Marketplace From the customer side, ecosystem is a platform with opportunity to meet a wide range of financial and nonfinancial needs, while communication process between a client and the Bank passes through the omni-channel system. White-label 33

34 Business lines strategies Corporate Business Active promotion of targeted banking products, convenient services Development of transaction services Introduction of new technologies, from cloud services to API-interfaces usage Retail Business Bank positioning as a Life Style Partner Further development of the remote service channels, such as internet and mobile banking Active use of predictive sales, proposals predicating customer needs The number of retail active clients is expected to double by 2021 The share of AK BARS Bank on the market of active individuals in the Republic of Tatarstan is expected to increase by more than two times Investment Business Development of the financial supermarket concept Make the investment in the securities market more accessible to customers - via online and mobile services Roboadvising investment services usage for automated advisory services on securities market Our facilities and services should be available to customers regardless of the physical presence of the Bank. We are preparing a pilot project to bring out our banking products to new markets without opening offices. Some of our services are already available for all smartphones and run without a visit to the Bank. 34

35 Appendix: IFRS Indicators 35

36 Financial Highlights Balance sheet, RUB BN _6м CAGR _6м Cash and equivalents % Securities portfolio (including direct repo and financial assets available % for sale) Due from other banks % Gross loans % Provisions % Net loans % Investment properties % Other assets % Total assets % Due to other banks % Customer accounts % Murabaha facility and Eurobonds % Securities issued % Subordinated debt % Other liabilities % Total liabilities % Equity % Total liabilities and equity % Key Ratios, % _6м Net loans / deposits Provisions / gross loans Overdue / gross loans Equity / assets Tier 1 capital ratio (1) Total capital ratio (1) Source: IFRS accounts 1) In 2015 Bank started calculating the capital adequacy in accordance with the requirements of the Basel Committee on Banking Supervision - Basel III 36

37 Financial Highlights (cont d) Profit and Loss Statement, RUB mln 1H H H 2017 Net interest income (1 819) Net fee and commission income Other income Operating profit Operating expenses (3 595) (3 893) (4 557) Total profit before provisions and taxes Provision for loan impairment (5 921) (9 973) (2 532) (Loss)/Profit before tax (5 439) Income tax 881 (574) (672) Net (loss)/profit (4 558) Source: IFRS accounts 37

38 THANK YOU FOR YOUR COOPERATION!