Alfa Bank increased reserves due to blocking assets in the West

In the second quarter, Alfa-Bank's non-credit loss expenses nearly quadrupled. The organization explained this, in particular, by reserving blocked assets

The largest private player in the Russian market, Alfa-Bank, faced a reduction in net profit in the second quarter of 2023, follows from its RAS financials. According to the results of the first half of the year, the financial result of the credit institution amounted to 52.2 billion rubles. In the second quarter, profit reached 25.3 billion rubles, being 5.9% lower than the level of the first quarter (26.9 billion rubles).

The main components of Alfa-Bank's earnings rose compared to the previous reporting period, but pressure was exerted by higher deductions to reserves. A representative of Alfa-Bank explained to RBC that part of these expenses related to assets blocked due to sanctions.

What formed the financial result Alfa-Bank's expenses on loan provisions in the first half of the year amounted to 55.7 billion rubles. In April-June, spending on this item increased by more than a quarter - from 24.6 billion rubles. in the first quarter to 31.1 billion rubles. in the second. The credit institution has also increased its provision for possible losses on securities valued at amortized cost. In the second quarter, expenses under this item approached 2 billion rubles. For comparison: in January-March they amounted to only 356.8 million rubles. Alfa-Bank's expenses to cover non-credit, "other losses" showed the largest increase - in the second quarter they amounted to 29.5 billion rubles, which is almost four times more than in the first (7.6 billion rubles). A spokesman for the bank explained that the increase in expenses under this item "is mainly due to frozen assets."

“The bank has always been conservative in terms of provisioning, and blocked assets are no exception,” he added.

At the same time, the main income items of Alfa-Bank are growing:

According to the financial statements, in the first half of the year, net interest income amounted to 145.7 billion rubles. The report does not provide data for the same period in 2022, when the business indicators of all Russian banks were not disclosed by decision of the Central Bank. In annual terms, net interest income increased by 84%, according to a press release from the credit institution. Relative to the first quarter, this item of income for April-June increased by 21.4% - from 65.8 billion to 79.9 billion rubles, follows from the reporting. Alfa-Bank's net fee and commission income for six months reached RUB 81.6 billion. In the second quarter, they were estimated at 45.2 billion rubles, which is 24.2% higher than the levels of the first quarter. Read PioneerProduct.by How to stop making ridiculous excuses and start changing Harassment: what happens and what is the role of a manager in the fight against it Marketplace will not save: why does business need an online store in the new realities

Currency revaluation continues to affect the financial result, clarified in Alfa-Bank.

“Despite the reduction in the share of foreign exchange assets on Alfa-Bank's balance sheet, the effect on the financial result from the change in the ruble exchange rate remains, but nevertheless decreases. The established ORP limits (open currency position. -) are observed by the bank in full, ”said a representative of a credit institution. He clarified that operations with financial assets, foreign currency and revaluation accounted for about 6% of Alfa-Bank's operating income for the first half of the year. Another factor that influenced the financial result in the second quarter was tax deductions at the beginning of the reporting period, Alfa-Bank added.

In 2022 and 2023, Alfa-Bank came under US , EU and UK sanctions . Against this background, last year the bank received the largest loss in its history - 117.1 billion rubles. The freezing of assets due to sanctions, as well as currency revaluation, had a one-time negative effect. At the same time, the bank's expenses on other reserves, which are designed to cover possible losses due to blocked assets, for the entire last year amounted to 30.9 billion rubles. less than in the first half of 2023.