Key Performance Indicators (KPIs)

Vozrozhdenie Bank is monitoring achievement of target KPIs on current basis which is aimed at advancing efficiency and effectiveness of operations in all key areas.

 

Our Goals KPIs Progress for 2013 Target KPIs for 2014 Progress for 2014 Comments on KPI Results Goals for 2015 Target KPIs for 2015 Risks
Balanced credit and
resource policy
Net interest margin – the ratio of net
interest income to average assets
4.5% 4.5% 4.6% The target level was exceeded, driven
by a solid growth in interest income
and control over funding costs
Maintaining a reliable balance-sheet structure with a comfortable share of liquid assets and a prevailing share of RUB instruments to generate the target net interest income 4–4.5%
  • Weak loan demand
  • Escalation of credit risks
       amid deteriorating macro
       environment
  • Asset growth – dynamics of the balance-sheet volume 1% 5–6% 8% Target exceeded due to positive currency revaluation and expanding the volume of liquid assets 3–5%
  • Lending slowdown
  • Client funds shortage
  • Capital shortage
  • FX fluctuations
  • Loan-to-Deposit ratio —– ratio of the loan portfolio before provisions to client funds (corporate and retail) 104% 100% ± 10% 98% Within the target range due to client funds outperformance 100% ± 5%
  • Outflow of client funds
  • Lending slowdown
  • Liquid asset share — – ratio of liquid assets (cash, cash equivalents and liquid securities) to total assets 20% 17–18% 25% Due to high uncertainty, the bank increased the share of liquid assets mainly with highly liquid securities, cash and cash equivalents At least 18%
  • Outflow of client funds
  • Liquidity shortage in
        the market
  •   RUB/FX ratio in the balance-sheet – ratio of RUB assets and RUB equivalent of FX assets 82/18 80/20 78/22 RUB collapse resulted into increase of share of FX-nominated instruments in the balance-sheet that was partially offset by a reduction in volume of FX assets   80/20
  • RUB devaluation
  • Robust risk management Provisions/NPLs 90+ – ratio of provisions for loan portfolio impairment to loans in arrears for more than 90 days 108% 120% 115% Over 100% coverage due to a conservative provisioning policy with timely recording of NPLs Maintaining adequate coverage for NPLs and credit quality control while keeping adequate capital position >100%
  • Deteriorating financial
        standing of borrowers amid
        negative macroeconomic
        trends
  • Cost of risk – ratio of allowances for loan portfolio impairment to average loan portfolio before provisions 2.3% <2 1.9% Reduction of SME loans due to a stricter lending policy and high portfolio turnover with an increase of large business share driven by FX revaluation 2–2.5%
  • Deteriorating financial
        standing of borrowers amid
        negative macroeconomic
        trends
  •   Total Capital Adequacy in accordance with Basel III (N 1.0.) – ratio of capital to risk-weighted assets calculated in accordance with Basel III requirements 11.2% At least 11% 12% Enhanced capital adequacy with a moderate growth of risk-weighted assets   At least 11%
  • Low returns, with limited
        additional sources of capital
        support
  • Expansion of allocations to
        instruments with higher risk
        level
  • Servicing corporate clients at every stage of business development Corporate loan portfolio growth rates —– dynamics of net corporate loan portfolio 34% 4–-5% -3% Tougher lending standards and reduction of quality demand in the economic recession environment led to a portfolio reduction in 2014 Servicing clients at every stage of business development. Further business diversification with a focus on SME and development of fee-generating products 3–4%
  • Escalation of credit risks
        amid deteriorating macro
        environment
  • Share of SME in corporate loan portfolio. SME segment includes legal entities and individual entrepreneurs with credit exposure less than RUB 750 million 58% 60% 55% Reduction of SME loans due to a stricter lending policy and high portfolio turnover with an increase of large business share driven by FX revaluation 60%
  • Slowdown of portfolio growth
  • Increase in the share of large
        businesses, with weakening
        RUB
  •   Share of microbusiness in the corporate loan portfolio. Microbusiness under this project includes legal entities and individual entrepreneurs with an average monthly revenue and credit exposure below RUB 15 million as well as other SMEs by the decision of the branch 0.9% 2.2% 1.6% Slowdown of growth in deteriorating economic environment   2.7%
  • Deteriorating financial
        standing of potential
        borrowers
  • High level of uncertainty in
        the system
  • Servicing retail clients at every point in the lifecycle Retail loan portfolio growth - dynamics of retail loan portfolio before
    provisions
    30% 13–15% 8.4% Although the retail portfolio was the main driver of expansion, growth was slightly below target due to fluctuations of market rates and a conservative lending policy Maintaining high credit quality

    Development of target cross-sales to target client segments

    Active use of remote service channels
    4–-5%
  • Deterioration of financial
        standing of borrowers and
        reduction of real disposable
        income
  • Mortgage portfolio growth —– dynamics
    of the mortgage loan portfolio before
    provisions including securitised
    mortgages
    32% 11–13% 7.9% Growth slightly below target given early repayments in securitised mortgage portfolio 1–3%
  • Deteriorating situation in
        the real estate market
  • Subdued effective demand
  •   Cross-sales ratio —– number of products
    per client
    1.1 3 2.7 Cross-sales increase driven by the launch of Campaign Management solution   3.5
  • Reduced economic activity
        among general public
  • Increased competition
  • Increased operating efficiency Cost-to-Income ratio– the ratio of
    operating costs to operating income
    before provisionsвов
    59.9% 58–60% 65% Due to worsening recession that sped up inflation and triggered sharp devaluation of RUB versus USD and EUR and slowing down of business activities growth of operating income was below target. Operating expenses growth mostly resulted from continued investments in operating efficiency project and expanding the sales network against a backdrop of growing inflation rates Continued optimisation of the operating model subject to strict control of expenses and reinforcement of the income component through fee-generating products 65%
  • Slowdown of optimisation
        project
  • Declining incomes
  • RUB devaluation
  • Operating expenses growthв - dynamics of operating expenses 1.4% 10–15% 7% Less
    than 10%
  • Need for increasing
        infrastructure investments
        above the planned
  • RUB devaluation
  • Share of non-interest income in operating income– the share of net non-interest income in operating income before provisions 35% 35–40% 32% High competition as well as decreasing level of fees at the market and low business activity combined with positive changes in interest income pressed the indicator down 30–35%
  • Low business activity
  • New client engagement rates
        are below planned
  • Further overall reduction of
        fees level in the sector
  • My Report

    Your page has been added successfully.