Moscow, March, 18, 2022 — Gazprombank (Joint Stock Company) (hereinafter, “Bank GPB (JSC)” or “the Bank”) published its consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS) for 12M2021 as at 31 December 2021.
Key financial indicators of the Gazprombank Group (hereinafter, “the Group”) for 12M2021 / as at 31 December 2021:
[1] Includes gross corporate and retail loans accounted at amortized cost before loan provisioning and also loans accounted at fair value.
RUB, bn.
| 31.12.2021 | 31.12.2020 | Change | |
| Assets | 8,721.9 | 7,530.7 | +15.8% |
| Shareholders’ equity (capital) | 832.2 | 739.3 | +12.6% |
| Cash and cash equivalents | 1,290.5 | 943.4 | +36.8% |
| Loans to corporate customers | 5,440.8 | 4,627.1 | +17.6% |
| Retail loans | 808.2 | 738.8 | +9.4% |
| Securities and investments in associates [2] | 708.5 | 776.5 | -8.8% |
| Corporate customer accounts | 5,260.5 | 4,305.4 | +22.2% |
| Retail customer accounts | 1,693.1 | 1,523.7 | +11.1% |
| Capital market borrowings | 281.0 | 285.1 | -1.4% |
| Subordinated debt | 96.2 | 69.7 | +38.0% |
| 12M2021 | 12M2020 | Change | |
| Net profit | 95.8 | 56.0 | +71.1% |
| Comprehensive income | 92.7 | 69.2 | +34.0% |
| 31.12.2021 / 12M2021 | 31.12.2020 / 12M2020 | Change | |
| Common equity Tier 1 capital adequacy (N20.1) | 8.4% | 8.7% | -0.3 p.p. |
| Tier 1 capital adequacy (N20.2) | 10.9% | 11.5% | -0.6 p.p. |
| Total capital adequacy (N20.0) | 12.3% | 12.6% | -0.3 p.p. |
| Loans-to-deposit ratio | 89.9% | 92.1% | -2.2 p.p. |
| ROE | 11.8% | 7.7% | +4.1 p.p. |
| ROA | 1.2% | 0.8% | +0.4 p.p. |
| Net interest margin [3] | 3.1% | 2.7% | +0.4 p.p. |
| Cost of credit risk [4] | 0.1% | 0.2% | -0.1 p.p. |
| Cost to income ratio [5] | 54.7% | 55.2% | -0.5 p.p. |
[2] Including trading securities, investment securities, and investments in associates.
[3] The ratio of net interest income for the reporting period to the chronological average of quarter-end interest-bearing assets for the year. Interest-bearing assets include those due from financial institutions, loans to customers and debt securities (all before loan loss provisions).
[4] Charges of provisions for loan loss and loan adjustment accounted at fair value for the reporting period to the chronological average of quarter-end interest-bearing assets for the reporting period.
[5] Operating expenses include salaries, other allowances and benefits to the personnel, and administrative expenses. Operating income includes net interest income, non-interest income and non-banking operating profits. Operating income does not include provisions and loan adjustments accounted at fair value.
Financial results
The Group ended 12M2021 with recorded net income of RUB 95.8 bn and comprehensive income of RUB 92.7 bn. By comparison, year-on-year, the Group’s net income and its comprehensive income amounted to RUB 56.0 bn and RUB 69.2 bn, respectively. The Group’s ROE grew by 4.1 p.p. to 11.8% in 12M2021 against that at year-end 2020. ROA was 1.2% in 12M2021 – a rise of 0.4 p.p. against 0.8% at year-end 2020.
The Group’s net interest income was RUB 214.8 bn in 12M2021, which is 31.3% higher than that in 12M2020 (RUB 163.5 bn), with interest income up 16.2% to RUB 473.3 bn and interest expenses up 6.0% to RUB 258.5 bn. Net interest margin was up 0.4 p.p. to 3.1% in 12M2021.
Non-banking segments ended 12M2021 with the operating income of RUB 21.6 bn (against a loss of RUB 1.1 bn in 12M2020), RUB 13.0 bn of which were non-recurring income from real estate sale to a third party.
Impacted by the above factors, the Group’s operating income (before provisions for loan loss and impairment of assets) reached RUB 284.4 bn in 12M2021 compared to RUB 239.0 bn in 12M2020.
Operating expenses amounted to RUB 155.5 bn in 12M2021 compared to RUB 131.8 bn in 12M2020. Higher expenses were driven by the continued implementation of projects for the business technology transformation, including transformation of the retail business. Therewith, the cost-to-income ratio was down 0.5 p.p. to 54.7% compared to 55.2% at year-end 2020.
Asset quality
Loan loss provisions totaled RUB 19.3 bn in 12M2021 compared to RUB 5.4 bn in 12M2020. Positive adjustments of loans and receivables accounted at fair value were RUB 16.9 bn in 12M2021 against the negative adjustment of RUB 9.1 bn in 12M2020.
The Group’s cost of risk (including valuation adjustment of loans and receivables accounted at fair value) dropped to 0.1% in 12M2021 compared to 0.2% at year-end 2020.
Business volumes
The Group’s total assets reached RUB 8,721.9 bn as at 31 December 2021 – up 15.8% against RUB 7,530.7 bn as at 31 December 2020.
Cash and cash equivalents reached RUB 1,290.5 bn as at 31 December 2021 compared to RUB 943.4 bn as at 31 December 2020.
The gross loan book before loan loss provisions was at RUB 6,249.0 bn as at 31 December 2021 − up 16.5% against RUB 5,365.9 bn as at 31 December 2020.
The gross loan book (net of provisions for loan loss and loan adjustments accounted at fair value) in the Group’s total assets was 69.0% compared to 68.4% as at the end of December 2020.
In 12M2021, corporate loans were up 17.6% to RUB 5,440.8 bn as at 31 December 2021 against RUB 4,627.1 bn at year-end 2020. Retail loans also showed growth, with their volume up 9.4% in 12M2021 – from RUB 738.8 bn to RUB 808.2 bn as at 31 December 2021.
The portfolio of securities and investments in the Group’s associates was RUB 708.5 bn as at 31 December 2021, down 8.8% (as at 31 December 2020: RUB 776.5 bn).
During 2021, the Group continued to consistently decrease the machinery segment of its business focusing on the development of the banking segment. This was implemented in line with the shareholder-approved Development Strategy of the Group in terms related to the gradual exit from investments in non-banking segments.
Accordingly in 2021, the Group entered an agreement to sell its controlling interest (51%) in the equity of a subsidiary holding company, UK UZTM-KARTEX LLC.
Additionally, agreements were made to sell assets and assign liabilities of subsidiaries operating in nuclear and petrochemical machine building and special steels production industries. These agreements came into effect on 11 January 2022.
Furthermore, the Group’s management approved plan to sell 100% participatory interest in a subsidiary holding company, Cryogas LLC (production and delivery of technical gas business). The plan was realized in the first quarter of 2022.
As at 31 December 2021, as a result of the above the Group fully gave up the control of UZTM-KARTEX Group, while other assets were reclassified to “assets held for sale”.
Corporate and retail accounts grew to RUB 6,953.6 bn as at 31 December 2021 against RUB 5,829.2 bn as at 31 December 2020 (total growth was 19.3%). At the same time, corporate accounts were up 22.2% to RUB 5,260.5 bn as at 31 December 2021 compared to that at year-end 2020 (RUB 4,305.4 bn), and retail accounts were up 11.1% in 12M2021 – from RUB 1,523.7 bn to RUB 1,693.1 bn.
Capital market borrowings as at 31 December 2021 were down to RUB 281.0 bn against RUB 285.1 bn at year-end 2020 (down 1.4%). At the same time, capital borrowings in the resource base declined 0.6 p.p. to 3.6%.
Capital adequacy
The Group’s Basel III total capital based on consolidated RAS financials amounted to RUB 907.1 bn as at 31 December 2021 − up 11.4% in 12M2021 compared to RUB 814.6 bn at year-end 2020.
As at 31 December 2021, the Group’s capital adequacy indicators were as follows: the Group’s total capital adequacy ratio was 12.3% (compared to 12.6% at year-end 2020 – a drop of 0.3 p.p. in 12M2021); Tier 1 capital adequacy ratio was 10.9% (compared to 11.5% at year-end 2020 – a drop of 0.6 p.p. in 12M2021); common equity Tier 1 capital adequacy ratio was 8.4% (compared to 8.7% at year-end 2020 – a drop of 0.3 p.p. in 12M2021).
As at the date of these consolidated financial statements release, the Group observed all statutory ratios of the Central Bank of Russia including capital adequacy ratios and liquidity ratios (unaudited data). The Group possesses all necessary financial and technological means to ensure the continuity of work and to perform all core operations in the territory of the Russian Federation.