Published: May 30, 2013
Russian bank sees 18% rise in profits during the first quarter.
Promsvyazbank (PSB) of Russia has announced an 18% rise in net profits in its latest quarterly results.
This week the bank – which is privately held and includes the European Bank for Reconstruction and Development as a stakeholder – released results for the first three months of 2013. As well as profits of RUB2.2bn (US$69mn) it reported a return on equity of 13.5% compared with 13.3% during the same period of 2012.
Operating income was up 7% year-on-year to RUB9.4bn, while net interest income rose by 10% to RUB6.9bn.
Alexandra Volchenko, the bank’s first vice-president and deputy CEO, is happy with that performance. “This is really strong for the first quarter,” she tells EMEA Finance by phone from the bank’s Moscow headquarters. “Usually the first quarter is the weakest for the banking system because of seasonality.”
If that’s the case, Volchenko and her colleagues could have a busy year ahead. The bank is seeing rising demand for credit from small and medium-sized enterprises (SMEs), which Volchenko believes bodes well for the Russian economy.
“We see some volatility and uncertainty in the market, in Russia and abroad in Europe, China and Asia, but at the same time see a positive trend in the SME market,” she says. “When we look at numbers of customers, in our case it’s increased significantly, on the lending and transaction side. We see new names in the market and new interest and activity.”
The bank has also taken its own measures to protect itself from that market volatility Volchenko mentions. Last year it raised US$400mn through seven-year subordinated eurobonds. Along with a rise in deposits, that dealmaking has given the bank a greater liquidity buffer, albeit it at a slightly increased cost of funds. In a market where surprises can lurk around any corner, that kind of cushion is welcome.
“We are ready for some turbulence,” Volchenko says. “At the same time we see positive trends, and we believe the performance of the bank will be quite strong in 2013.”