Page 70 - bne IntelliNews Russia Country report May 2017

The IFRS report of insurance group Uralsib for 2016 "in all significant respects does not accurately reflect the financial position of the group ", Vedomosti daily reported on June 2, citing the auditor Unikon. Reportedly, the group's negative capital as of end of 2016 amounted to RUB2.7bn, with pre-tax losses of RUB2.75bn (€43.3mn). The auditor notes that Uralsib does not comply with solvency ratios and asset quality requirements of the central bank. Vedomosti reminds that as of August Uralsib had its OSAGO car insurance license pulled and had to transfer all of its car insurance portfolio, almost half of its business, to third parties. The auditors are also alarmed by the "numerous" legal cases filed against the insurer (over 100, according to the newspaper report), with the possible compensations awarded being impossible for Uralsib to pay.
Net profit of Russia's Vozrozhdeniye bank in January-March was RUB537mn (€8.7mn), the lender said on May 29. The bank's net interest revenue was 28% up to RUB2.9bn and net interest margin was 4.8% as opposed to the management's target figure of 4.5% and 4% in the first quarter of 2016. Operation costs were down 11%, which the lender explained by savings on personnel, as the number of employees declined by 6% over the past year. The bank's credit portfolio was up 3% in January-March, while corporate loans increased by 2%. RUB1.8bn worth of loans was released to new clients in the oil and gas industry, construction and municipal authorities.
8.2 Central Bank policy rate
With inflation now just above the CBR’s 4% target (it was 4.1% in May) the central bank is expected to cut rates a bit faster this year to bolster growth. The rate currently stands at 9.25% after a surprise cut in May.
70 RUSSIA Country Report May 2017 www.intellinews.com