Financial Statements under IFRS

JSC "BPS-Bank" Performance Results in 1H 2011

Highlights of the Bank’s financial performance under IFRS for the six months ended on June 30, 2011:

The Bank’s net profit (IFRS) totaled BYR 84.9 billion;

Net interest income before provision reached BYR 291.3 billion;

Net fee and commission income grew to BYR 119 billion;

Operating profit before provision was BYR 509.5 billion;

The loan portfolio before provision for loan impairment grew up by 41.4% from the beginning of 2011;

Capital adequacy in accordance with Basel 1 made 9.3%.

The Bank’s efficient perfomance in the 1st half-year 2011 is evidenced by the growth of the key showings of the Bank’s financial activity compared with the six months of the previous year. Net interest income (before provision) increased by 125.3%, net fee and commission income grew by 37.2%, net profit – 58.4%.

Operating cost-to-income ratio before provision made 38.8%, i.e. improved by 14.1 p.p. compared with the respective period of the previous year.

The Bank's assets increased up to BYR 14,009.7 billion. Asset growth from the year start made 59.1%. Income-generating to total assets ratio made 71.69%. Return on assets was 1.5%. Return on equity made 16.0%.

The loan portfolio (before provision) reached BYR 9,338.4 billion. Allowance rate for loan impairment made 4.1%, compared with 3.5% at the beginning of the year. Increase of lending volume was supported both by corporate sector (corporate loans increased by 44.4% in comparison with the year start, and made BYR 8,302.2 billion) and retail sector (retail loans increased by 21.5% up to BYR 1,036.2 billion). Adjusted for foreign exchange fluctuations growth of corporate loans made 11.8%, loans to individuals – 15.9%.

The share of non-performing loans in the Bank's loan portfolio increased from 0.87% as of 2011 year start up to 1.46% at the end-June 2011 and made BYR 136.1 billion. Meanwhile, allowance for loan impairment created by the Bank fully cover the volume of non-performing loans: NPL coverage made 2.8.

The volume of debt securities issued as of end-June 2011 made BYR 503.9 billion. Out of them, liabilities to legal entities on bonds and certificates of deposits made BYR 439.1 billion, liabilities to individuals made BYR 64.8 billion.

In accordance with Basel Accord, the amount of the Bank's equity as of June 30, 2011 for the purposes of capital adequacy was BYR 1,087.5 billion, and Tier 1 capital made BYR 938.7 billion, with CAR being 9.3% and 8.0%, respectively.

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