“Russian standard” has again slipped into losses after a profitable year

Loss of 6.4 billion rubles received by “Russian standard” in the first quarter, in the Bank explain one-time costs. “Losses in the first quarter of 2016 mainly due to one-time effects are of a technical nature and do not relate to the current results of retail business”, — said the press service of “Russian standard”.

The official representative of the Bank said that the damages were received on operations with currency, and also “because of the characteristics of accounting transactions swaps, according to RAS”. Indeed, the loss from currency revaluation amounted to more than 3 billion rubles Losses from operations with swaps from the reporting not visible, and in the option operations, the Bank has lost slightly less than 1 billion rubles.

Moody’s analyst Alexander Proklov believes that the Bank has started to show the real losses that have accrued in 2015. “Russian standard” continues to dosdat reserves for non-performing loans and is reflected in his results,” he says. According to reporting, “Russian standard”, in January-March 2016, the Bank expenses on creation of provisions for loans exceeded the income from dissolution of reserves by 5.3 billion rubles, the Bank coastal reserves on loans to households, spending is 15.7 billion rubles a year ago, the Bank spent on the creation of reserves to 31.4 billion rubles.

“In addition, the Bank continued payments to retired employees and reduced employees (in the framework of cost optimization), unable to find work”, — reported in a press-service of the credit institution. In the first quarter of 2016, “Russian standard” has spent on staff 1.6 billion RUB. against 2.9 bn RUB in 1Q 2015. In the past year, the Bank cut staff: if at the beginning of 2015 the average number of employees was 16,9 thousand people, on 1 January 2016 this figure has decreased almost twice — up to 8.9 K

In mid-April it became known that Bank “the Russian standard” it leaves the first Deputy Chairman of the management Board Vladimir Lush, who has worked at the Bank since its founding in 1999. According to the newspaper “Kommersant”, the Bank may take also the Chairman of the Board Dmitry Levin. The reason for the departure of top managers, according to sources of Kommersant, was the discontent of the shareholder the Bank’s financial results.

According to the official representative of “Russian Standard”, the Bank forecasts the reduction of damages to zero and access to profit in the second half of 2016. “It has to happen through the implementation of a new business model and further improve operational efficiency of the business,” he said, adding that the Bank’s new strategy involves the introduction of new credit products with a low level of risk, based on individual pricing, lower funding costs and ongoing operating costs, and promoting Bank products that are not associated with credit risk.

By the end of 2015 “Russian standard” was able to get the profit of 16.5 billion rubles at the expense of its shareholder Rustam, Tariko, which was twice increased the capitalization of “Russian standard” own shares in alcohol companies — 4.9 billion rubles in may and 9,35 billion rubles in August. “Donations” from the shareholder was not enough, and the Bank’s financial position was fixed due to the restructuring of subordinated Eurobonds, which brought him another $370 million At the end of the year “the Russian standard” also has received from the state OFZ bonds at 5 billion rubles to increase capitalization. “Restructuring of Eurobonds was also issued as a donation from the shareholder, and the Bank showed a profit, without all those injections “Russian standard” and most likely would be unprofitable”, — explained Alexander Proklov.