In 2016, Renaissance Credit posted net profit of Rub 1.5 bln under IFRS compared to a Rub 5.1 bln loss in 2015, the lending institution's press service reported.
Net interest income for twelve months of operations soared 70.3% to Rub 11.8 bln. This became possible following improvements in the credit portfolio quality which led to lower contributions to loan loss provisions (net expenses incurred to build provisions against impairment of the credit portfolio amounted to Rub 4.9 bln in 2016, which puts the cost of risk at -6.6%). Net expenses incurred to build provisions against impairment of the credit portfolio totaled Rub 12.7 bln in 2015, i.e. the cost of risk equaled -17.4%.
The bank's commission income amounted to Rub 5.4 bln vs. Rub 5.8 bln in 2015.
As of December 31, 2016 the bank's net retail credit portfolio expanded by 30.4% to Rub 76.5 bln. Credit that the bank issued last year reached Rub 89 bln. Meanwhile, untargeted credit accounts for 59.3% of the portfolio, 31.2% falls to targeted credit, and 8.6% to credit cards.
In 2016, the share of NPL in the credit portfolio before provisions (30+) equaled 6.6% (of the total portfolio) vs. 14.8% in 2015. As of December 31, 2016 deposit accounts stood at Rub 71 bln compared to Rub 79.1 bln in 2015, down 10.3% y-o-y. A contraction in the deposit portfolio is attributed to the bank's policy of optimizing the cost of borrowed funds and managing liquidity. The ratio between credit and deposit accounts was 113.7% in the reporting period.
The bank's operating income more than tripled to Rub 11.5 bln in 2016. The bank managed to attain this result by cutting the cost of risk, namely by improving debt recovery at all stages and reducing interest costs.
"The previous year ended with a robust financial result. After two years of losses we turned net profit of Rub 1.5 bln, while the retail credit portfolio grew to Rub 80.7 bln. The main asset growth driver was POS loans that allow us not only to expand the credit portfolio, but also to build a quality client base to sell other products of the bank. In 2016 alone we attracted over 1.2 mln customers through this channel. Renaissance Credit has become the fastest growing bank in Russia in this segment, with the credit portfolio leaping 49.8% y-o-y, and the bank's market share grew to 12% (vs. 8.7% in 2015). All these factors helped the bank become a Top 3 player in the POS lending market. We expect our market share to grow to 15% this year," claimed Alexey Levchenko, management board chairman at Renaissance Credit.
