Alfa-Bank received a loss for the first time since 2009

The loss of Alfa-Bank for 2022 amounted to ₽117.1 billion and became the largest for it in history. Incomes on the main items increased, but the freezing of assets and currency revaluation had a one-time effect,

Alfa-Bank ended 2022 with a loss: its size under RAS amounted to 117.1 billion rubles, follows from the published statements of the credit institution. The last time the bank showed a negative financial result in 2009 (3.35 billion rubles). Both before and after that, it remained profitable (the bank's reporting on the Central Bank website has been available since 1999). In particular, according to the results of 2021, the profit of Alfa-Bank amounted to 136.6 billion rubles.

“In the first half of 2022, the bank recorded a one-time loss due to the fact that part of the assets in foreign currency was frozen, in addition, the currency revaluation had an impact on the financial result and reporting under RAS,” said Alfa-Bank CEO Vladimir Verkhoshinsky.

“Alfa-Bank was the largest bank in the country in terms of international settlements with banks and counterparties in other countries, and the sanctions could not but have an impact. At the same time, excluding one-time losses from currency revaluation, the group’s profit at the holding company level amounted to more than $300 million, and Alfa-Bank not only showed profit in the second half of 2022, but also shows strong growth in the first quarter of 2023,” he added. For January and February 2023, net profit (according to IFRS, not according to RAS) has already amounted to 26.1 billion rubles, which is 70% more than the pre-crisis 2021 and significantly better than the negative result obtained in the first two months of 2022 (loss 38. 4 billion rubles), Verkhoshinsky specified.

In 2022, Alfa-Bank's net interest and fee income increased to RUB 211.7 billion and RUB 160.4 billion. respectively against 175.8 billion and 151.5 billion rubles. a year earlier, follows from the reporting under RAS. However, the bank has significantly increased the cost of reserving. Thus, the volume of coverage of possible losses on loans and balances on correspondent accounts increased five times, to 167.4 billion rubles. The credit institution also allocated 4.2 billion rubles to reserve possible losses on securities valued at amortized cost, although in 2021 this balance sheet item was close to zero. Provisions for other losses quadrupled to RUB 30.9 billion.

For comparison: in the pandemic 2020, Alfa-Bank allocated 57.5 billion rubles to reserve loans, and the reserves were completely restored for the other two balance sheet items. Alfa-Bank recorded increased expenses to cover possible credit losses during the crisis of 2014 - then, according to RAS reporting, expenses exceeded 89 billion rubles.

At the same time, last year Alfa-Bank did not experience problems with capital: its equity capital adequacy ratio (N1.0) at the end of 2022 was at the level of 14.07%, having decreased by only 0.3 percentage points over four quarters (p. P). The requirements of the Central Bank, taking into account Basel allowances for this indicator, amount to 11.5% for systemically important credit institutions. The basic capital adequacy ratio (N1.1) of Alfa-Bank increased by 0.7 percentage points in 2022, to 11% (the required level, taking into account allowances, is 8%). The capital adequacy ratio (N1.2) remained practically unchanged and amounted to 12.1%.

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According to Verkhoshinsky, last year the growth of the bank's retail loan portfolio amounted to more than 20%, and the portfolio of small and medium-sized businesses - more than 30%. “Since the beginning of 2022, the retail client base has grown by 17%, to 26 million people, and the corporate client base has increased by 24%, to 1.3 million companies,” the head of the bank said.

How Russian banks survived the year

Most systemically important Russian banks in 2022 came under blocking sanctions from the United States , Great Britain or the European Union. Alfa-Bank, the largest private bank in the country, came under severe restrictions in the second place - in April 2022 (under US sanctions), while sanctions were introduced against a number of banks already at the end of February. In general, the banking sector remained profitable last year, but its net profit amounted to only 203 billion rubles, the Central Bank reported, which is the worst result since 2015. In particular, the net profit of the largest bank in the country, Sberbank, amounted to 300.2 billion rubles. according to RAS, having decreased by 75.7% over the year.

In total, among 13 systemically important banks, only two ended the year with a loss, said on Wednesday, April 5, the first deputy chairman of the Central Bank, Dmitry Tulin. The losses are large, he specified, but "they do not threaten their viability at all, the banks look to the future with confidence."

VTB has already reported on the loss - also a record one in its history - to Alfa-Bank. It amounted to 756.8 billion rubles. according to Russian standards against a profit of 242.6 billion rubles. a year earlier. Under IFRS, the loss was less - 612.6 billion rubles, due to one-time income in the amount of 165 billion rubles. from the merger of Otkritie with VTB in December last year.