B & n Bank in the second quarter of 2016 received a net profit under IFRS in the amount of 229 million rubles. against a loss of RUB 3 billion in the second quarter of last year.
Compared to the first quarter, when the credit institution has received 2.8 billion rubles of net profit, it worsened a positive financial result 12 times, evidenced by its reporting. In the second quarter, the Bank increased its operating expenses from 5.8 billion rubles in January-March to 6.7 billion roubles) provision for impairment of assets (RUB 1.3 billion to 2.6 billion RUB), evidenced by statements.
In the whole first half of 2016, the Bank posted a net IFRS profit of 3.01 billion RUB. against a loss of 2.4 billion RUB, the company informed.
Net interest income before provisions for impairment of assets in the first half increased from 7.4 billion to 10.4 billion roubles Expenses on creation of reserves were 4 billion rubles, which is more than three times less than the previous year (13.4 billion rubles). Bank’s net interest income amounted to 6.4 billion rubles. against a consumption of 6.1 billion rubles a year earlier.
Among the main reasons for the increase in net profit for the half year the Bank called the increase in operating income in connection with the increase in business volumes over the last 12-18 months and reducing risk on the loan portfolio from 8.9% in January-June last year to 3.9% due to improving asset quality.
Adjustments in the first quarter
B & n has adjusted some of the indicators according to IFRS the first quarter of 2015-2016, the net profit for the first quarter of 2016 grew at an annual rate of 17% (to 2.8 bln), in January—March last year — dropped by 5.6 times (from 3.1 billion to 562,6 million rubles).
As stated in the financial statements, the quarterly earnings in 2015 has decreased due to the lowered costs of reserves, which, after adjustments, increased by 2.6 billion rubles., to 4.35 billion rubles.
In the first quarter of this year net profit of the Bank increased after an adjustment to interest income. Originally, they were underestimated, as was incorrectly accounted for income from early repayment of financial instruments with non-market rates. After adjusting interest income increased by 1.3 billion RUB (up to 21.2 billion rubles).
In addition, the Bank in the first quarter of 2016 underestimated the costs of reserves 977,8 million rubles (530,5 million roubles for legal entities and 447,3 for individuals), and also raised on 535,5 million rubles. net profit on foreign currency transactions and 607,4 million RUB unrealized gains on operations with investments available-for-sale.