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Joint Stock Company "The Ural Bank for Reconstruction and Development" ("UBRD"), rated B (stable) by S&P, has mandated BCP Securities, BNP Paribas and Sberbank CIB as Joint Lead Managers and Bookrunners to arrange a series of fixed income investor meetings in Europe, commencing on June 18th. A US$ Reg S Tier 2 offering may follow, subject to market conditions. FCA/ICMA stabilisation.
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- Since the beginning of this year the UBRD's assets increased by 8.3%: by April 1, 2013 assets exceeded RUB 154 bln (January 1, 2013: RUB 142 bln).
- Equity has increased by 5.9% from RUB 12.9 bln to RUB 13.6 bln. The capital adequacy ratio (H1) was 10.79% which is above the minimum level of requirement criteria of Central Bank of Russia – 10%.
- Net income reached RUB 320.2 mln.
- On February 7, 2013 UBRD issued debut Euro-Commercial Papers for the amount of USD 50 mln.
- On February 28, 2013 the Bank attracted a second tranche of subordinated debt in the amount of USD 20 mln with maturity of six years. Earlier, in December 2012, UBRD received the first tranche of a total amount of USD 30 mln.
During Q1 2013 total loan portfolio showed an increase of 4.5% (April 1, 2013: RUB 88.6 bln, January 1, 2013: RUB 84.7 bln). Corporate loan portfolio increased by 4.4% compared to Q4 2012 and exceeded RUB 41 bln (January 1, 2013: RUB 39.5 bln). Retail loan portfolio increased by 2.7% and amounted to RUB 37.5 bln by 1 April 2013 (January 1, 2013: RUB 36.5 bln).
Funding base maintained growing trend as well. As of April 1, 2013 customer account balances exceeded RUB 101.7 bln (January 1, 2013: RUB 95.6 bln), with balances of corporate clients increased to RUB 31.3 bln. And retail deposits were RUB 65.1 bln ( January 1, 2013: RUB 60 bln).
During the first three months of 2013 the total number of active clients of the Bank has also increased considerably: from 688,986 to 717,430 customers. UBRD provided loans to more than one million private customers: as of March 1, 2013 UBRD has provided 1,013,226 loans.
During the first quarter UBRD opened 55 new offices covering the most part of regions in Russia. The Bank entered markets of the Republic of Kabardino-Balkaria, Karelia, Mordovia and Sakha (Yakutia), Primorye Territory, Arkhangelsk, Vologda and Tambov regions. On April 1, the Central Bank of Russia has registered 357offices; ATM network increased by 66 units to 966 ATMs.
The first quarter of the year was successful for the Bank in terms of business performance indicators. Good results were achieved in the corporate business: by April 1, 2013 we have fixed the maximum current account balances of our clients. Retail business as well showed very good results with 40% increase. During January – March 2013 Russian credit organizations earned a profit of RUB 239.4 bln, which is 10.6% less than the same period in 2012. Thus, the Bank continued to grow faster pace of the banking sector, says Anton Solovyov, President of UBRD.
NOMOS-BANK and Promsvyazbank have announced the successful closing of the book of Series BO-05 Bond Issue of UBRD.
The bid book for bond placement was closed at 17:00 Moscow Time on April 17, 2013.
During t marketing the coupon rate was set at the range between 11.00 - 11.25% per annum, which was lower then initial rate of 11.15 - 11.65% per annum. Investors have made the offers within the coupon rate range from 11.00% to 11.50% per annum. Final coupon rate was set at 11.15% per annum. The RUB 2 bln bond issue was oversubscribed by more than two times with total demand equaling more than RUB 5 bln.
Considering the demand on the market UBRD has decided to accept offers from 53 investors. In addition to the Lead Arrangers, NOMOS-BANK and Promsvyazbank, the bond placement sindicate included 23 participants.
Co-Arrangers: OJSC “Bank “Rossiya”, “Element” (LLC); “BC REGION” (LLC).
Underwriters: “Asian-Pacific Bank” (OJSC); OJSC Bank ZENIT; JS “INTERPROGRESSBANK” (CJSC); Commercial Bank “Koltso Urala” (LLC); OJSC Commercial Bank “EurocityBank”, “VELES Capital Investment Company” (LLC); RONIN Investment Company (LLC).
Co-Underwriters: Commercial Bank “EUROTRUST” (CJSC), JSC “Coalmetbank"”, Commercial Bank “ARESBANK” (LLC), SB Bank (LLC), Joint Stock Commercial Bank “Avangard”, OJSC “ROST” BANK, CB “International Bank of Development” (CJSC), CB “Khlynov” (OJSC), CB “Expert Bank” (CJSC), “M2M Private Bank” (OJSC), Joint Stock Commercial Bank “Sprut”, RWM Capital Asset Management, Bank “Petrocommerce” (OJSC).
UBRD’s RUB 2 bln bond issue of Series BO-05 was admitted to trading on MICEX March 29, 2013 (the identification number of the issue – 4B020500429B). The interest rate for the second coupon has been set and is equaled to the interest rate for the first coupon (put option – 1 year). The coupon will be redeemed twice a year.
It should be pointed out that the placement of the bonds of Series BO-05 will take place on MICEX April 19, 2013.
Issuer has credit rating of “B” (Stable) from Standard & Poor's. Bond issue BO-05 meets the requirements and is eligible to be included in the Bank of Russia Lombard List. As of today, the issuer has two rouble bonds issues which are in the market circulation: bonds Series 02 (RUB 2 bln.) and bonds Series BO-01 (RUB 2 bln.). All securities are traded on MICEX in the List В and are included in the Lombard List and List of securities accepted as collateral under repurchase agreements (REPO) of the Bank of Russia.
National Rating Agency confirmed UBRD's AA- credit rating on a national scale with a «positive» outlook.
National Rating Agency confirmed the individual credit rating of Ural Bank for Reconstruction and Development at AA- level on a national scale and changed outlook to "positive". According to Mr. Vladimir Zotov, Head of Financial Institutions and Investment Services, this improvement of outlook reflects positive dynamics of financial indicators of UBRD and Bank's capitalization by existing shareholders.
"UBRD effectively implements the model aimed at rapid growth of business and financial performance through active regional expansion and growth of retailing component. The Bank is one of the largest financial organizations in the country by the regional network, the number of retail clients, the volume of transactions in retail lending, payments via plastic cards, the number of own ATMs. The Agency positively assess the ability of shareholders of the Bank to maintain adequate capital and the consistency with which the Bank is implementing its development strategy. The Agency sees an opportunity to increase the Bank's rating and assigned a "positive" rating outlook. Subject to maintaining stable asset quality indicators, liquidity and capital adequacy, in the event of further successful implementation of the strategy of the Bank this forecast can be implemented by the Agency", says Maxim Vasin, Senior Analyst of NRA.
As stated in the official report of the Agency, by implementing the medium-term development strategy for the period up to 2015 UBRD is becoming a major credit institution at the federal level. Thus, in 2012, the Bank made a rebranding, adjusted internal procedures, developed new products and improved long-term approach to working with clients. The result recorded a substantial growth in sales of banking products and services. As of February 2013 an increase in deposits was around RUB 1.5 bln, in loans to individuals – RUB1.7 bln. In addition, over the past year UBRD doubled the number of regions of presence from 21 to 44. And Bank’s equity currently stands at RUB 13.6 bln.
At the end of February 2013, The Ural Bank for Reconstruction and Development has received a second tranche of subordinated loan in the amount of USD 20 mln with the term of 6 years. Earlier, in December 2012, the Bank has received the first tranche of a total of USD 30 mln.
As a result of these measures UBRD has managed to increase additional capital thereby increasing the total capital as well during two months of this year from RUB 12.9 bln as of January 1, 2013 to RUB 13.6 bln as of March 1, 2013.
Sergei Sisoshvili, Vice-President, Head of International Markets, said that subordinated loan had a positive impact on the growth of capital adequacy and the possibility of growth of bank assets in the future.
"Long-term funding is another evidence of the growing confidence of foreign investors in UBRD", he said.
The Banker journal has published review of banking industry in Russia, where The Ural Bank for Reconstruction and Development took fourth place among the top-10 Russian banks showing the highest growth rates. The key indicators used by analysts of the journal were the size and change rate of Tier I capital.
In 2012 UBRD has shown growth in all business areas. Assets of the Bank grew 41% to RUB 142.4 bln, equity increased by 33% to RUB 12.9 bln, while the capital adequacy ratio 11, 01%. UBRD has also doubled the number of regions of its presence broadening its network to 397 offices.
Moreover, last year the Bank began actively develop its international relations. Thus, the total financing of foreign trade contracts has doubled up to USD 200 mln in 2012.
To remind, by 2015 and according to its 3.2.3 Strategy UBRD plans to triple office network and net operating income, and double the number of clients.
In 2012 the Ural Bank for Reconstruction and Development met all key objectives set, while the targets have been already achieved by November 2012.
The Bank's assets grew 41% in 2012 totaling RUB 142.4 bln, equity increased to RUB 12.9 bln (+33%) by January 1, 2013.
Capital adequacy ratioof 11.01% has exceeded the minimum benchmarks set by both the Management of UBRD (11%) and the Central Bank of Russia (10%). However, it ped by 0.59% as compared to 2011 due to the rapid growth of assets and as a consequence of the overall market situation in the past year.
Pre-tax profitfor the year 2012 increased by 12.5% to RUB 1.4 bln. Accrued dividends totaled RUB 300.4 mln for nine months of 2012
“Primarily, the Bank reached these targets with improved efficiency of business processes and the consistent implementation of the ‘3-2-3’ strategy approved in 2011. In 2012 UBRD pursued rebranding campaign, updated internal procedures, developed innovative products and improved client service approach based on the more than 20 years expertise. As a result we have recorded a significant increase in sales”, says Anton Solovyev, CEO of the Bank
Retail loan portfolio increased by 80% (from RUB 20.3 bln in 2011 to RUB 36.5 bln in 2012). The largest share of it still accounts for by unsecured lending (94.4%), which has increased by 78.9% during the last year. Corporate loan portfolio of UBRD grew by more than 38% to RUB 44 bln in 2012.
Given the growth of lending volume of 2.5 times in two years the total share of problem loans has declined to 4.65% (5.91% in 2010, 5.63% in 2011).
Aggregate customer accounts balances have increased over the past year by 36.9% (RUB 95.7 bln). The individuals’ accounts balances have exceeded RUB 66 bln, which is 34.4% more compared to last year, and corporate clients’ accounts were RUB 29.7 bln (+43%).
During 2012 the Bank has issued more than half a million of plastic cards, and the number of active cards exceeded one million pieces. The number of credit cards with a grace period has increased by more than 26%, and debit cards by 19.7%.
Last year UBRD significantly expanded its network: the total number of offices reached 397. During the year the Bank has opened three branches in Novosibirsk, Krasnodar, and St. Petersburg. As of January 1, 2013 UBRD’s offices operate in 44 regions of the country. Thus, the number of regions of presence has almost doubled as compared with 2011. So far, the Bank’s network covers all federal districts of the country. In the meantime, the ATM network has been increased to 902 (+24%).
Number of employees increased by 40% over the year: currently, the Bank has more than 5500 people. During 2012 the Bank carried out a review of the salary level, which has resulted in the salaries of certain categories of employees have been revised upwards. According to the information analytical service of web portal Banki.ru UBRD tops in terms of salary in the Sverdlovsk region as of the first nine months of 2012.
The leading positions of the Bank in 2012 were confirmed by studies of leading Russian information and rating agencies:
Portal Banki.ru ranks UBRD:
- #26 by retail deposits;
- #40 by net assets;
- #41 by loan portfolio.
- #27 by deposits;
- #40 by assets;
- #56 by equity.
In May 2012 the National Rating Agency confirmed the individual credit rating at AA- national scale. In October Standard and Poor`s affirmed the Bank’s BB rating with stable outlook, national scale rating at ruA-
The total order book for debut Euro-Commercial Paper issue was closed on Thursday, January 31, 2012, with USD 50 mln. Overall demand exceeded twice the announced volume underscoring investors’ appetite. Names of investors from Russia, Switzerland, Luxembourg, and other European are listed among the participants. The ECP Programme totaling USD 200 mln was arranged by BCP Securities, LLC and VTB Capital.
“The Bank plans to continue active funding in Russian and International Capital Markets. This promotes UBRD entering international markets, expansion of international creditors’ base and diversification of liabilities given that the Bank’s portfolio includes large share of consumer loans and credit cards, a short-term funding, which is in line with duration of assets”, says Sergey Sisoshvili, Vice President, International Markets and Financial Institutions.
Next issues under this Programme are scheduled for 2013-2014.
The total volume of the trade finance portfolio of the Ural Bank for Reconstruction and Development approached USD 200 mln by the end of 2012.
“The Bank’s active position in international markets during difficult macroeconomic conditions emphasizes the confidence of foreign creditors in UBRD and contributes to economic development in all regions of presence of UBRD”, says Sergey Sisoshvili, Vice President, International Markets & Financial Institutions.
UBRD’s partners include Deutsche Bank AG, Commerzbank AG, VTB Bank (Deutschland) AG, BHF-Bank Aktiengesellschaft, Banque de Commerce et de Placements SA, UniCredit SpA, Nordea Bank AB, Fifth Third Bank, and others. The Bank will continue developing relationship with other international financial institutions such as Raiffeisen Bank International AG, Credit Suisse AG, UBI Banca, and London Forfaiting Company Ltd.
The Ural Bank for Reconstruction and Development takes a lead in the list of professional players in the securities market of Yekaterinburg and Sverdlovsk region by results for the nine months of 2012, according to Delovoi Kvartal Magazine.
The Bank’s turnover from its broker-dealer activities in Yekaterinburg and Sverdlovsk region during this period totaled over RUB 2 trillion (123% increase compared to results of 2011).
According to the magazine, as of November 1, 2012 there are 22 companies, including 10 banks, holding a license to operate as a professional participant of the securities market in Yekaterinburg and Sverdlovsk region. The aggregate turnover of the securities market participants registered in the region amounted to over RUB 6 trillion for the nine months of 2012. Meanwhile UBRD had 30.5% share of the total turnover.