Bank “Opening” has lost 2.6 billion rubles due to “overexposure”

The profit of the Bank “FC OTKRITIE has made over the past year 1.5 billion compared to 6.6 billion rubles a year earlier, according to the Bank reporting under IFRS. Most of the profits “ate” the bond Bank “Peresvet”, said during a conference call with the financial Director of Bank “Opening” Sergey Kovtun.

Just drop in profits was influenced by a combination of factors, said Kovtun. First, the Bank optimised its business processes and cut staff, which duplicated functions. “The cost of the payment reduction was about 800 million rubles”, — said Kovtun.

“As we aggressively move towards improving our business processes, we started to work with consultants. These costs amounted to 900 million roubles”.

The most important point of the effect on net income had the situation with the Bank “Peresvet”. Negative revaluation amounted to 2.6 billion rubles, said the Bank’s CFO. According to him, the revaluation was consistent with the fall in the value of bonds up to 30% of the nominal value.

Total operating income “FC “Discovery” provisions for impairment of assets amounted to 84.7 billion roubles at the end of last year. The main source of income of the company in 2016, steel, net interest income, trading and net fee and Commission income, which amounted to 41.1, 37.0 and 15.2% of total operating income, respectively. Net interest income adjusted income from operations with swaps amounted to 68,6 billion rubles, including income from swap transactions in the amount of RUB 33.8 billion for the year 2016. Net interest margin increased to 4.4% last year compared to 3.8% for 2015. Net fee and Commission income in 2016 increased by 10.3% compared to the same period last year and amounted to 12.9 bln.

The Bank of Russia from October 21, 2016, the moratorium on satisfaction of requirements of creditors “Peresvet”, which lasted almost six months. However, major lenders took the decision on the conversion of bonds into capital of the Bank. In February, the Bank published a restructuring of its bonds, suggesting their holders to extend the maturity 2034-2036 years. Investors were promised coupon income in the amount of 0,51% per annum and the payment of compensation in the amount of 0,25–0,51% of the face value of the bond (2,5–5,1 RUB), depending on the issue. After the disclosure of the terms of quotations of bonds of Bank “Peresvet” on the Moscow stock exchange fell to historically low values. Their market value has decreased to 18-30% of the nominal value (depending on series), and the price of some bonds fell to 13-15% of the nominal value. But in the end the holders of six issues of the nine approved the conversion and the Bank, the Central Bank decided to pay for the rehabilitation.