Home Credit Bank announces financial results for 6 months
Home Credit and Finance Bank LLC (HCF Bank) announces consolidated financial results of its activities in RUSSIA and Kazakhstan for the 1st half of the year in accordance with International Financial Reporting Standards (IFRS). HCFB Bank ratings: Fitch — BB-, Expert RA — ruA-; ACRA A (RU); subsidiary bank Home Credit Bank JSC (Kazakhstan), 100% owned by HCFB Bank, Fitch -B+.
Net profit of Home Credit Bank in the first half of 2021 amounted to 7.4 billion rubles, which is twice as high as the results of the previous year (3.7 billion rubles). This is one of the best results since 2013, when the bank began publishing consolidated financial statements in accordance with IFRS.
The return on assets of Home Credit Bank amounted to 5.0% against 2.2% for the same period in 2020. As a result, the bank ranked second in terms of return on assets among the 50 largest banks (according to the Banki.ru portal). In the first half of 2021, the return on equity increased to 17.2% (from 8.8% in the first half of 2020).
Profit growth is a direct result of the increase in business volumes with a consistently high quality of assets. At the end of June, the bank's net loan portfolio amounted to 229.1 billion rubles. (growth since the beginning of the year - by 7.1%). At the same time, the dynamics of the portfolio continues to accelerate: for example, in the first quarter of 2021, the bank's portfolio increased by 2%, and in the second quarter of 2021, the growth rate increased to 4.9%.
In the first six months, the volume of cash loans issued doubled compared to the same period in 2020. In addition, our clients used credit cards more often: the volume of transactions with them increased by 1.3 times. At the same time, the number of issued credit cards (excluding the "Freedom" installment card) increased 4.5 times. This is largely due to the launch of innovative products: loans with a low rate, refinancing, a credit card with a "long" grace period of 120 days.
Also, new risk assessment models have positively affected the growth of the business: this has allowed us to analyze the needs of our customers and offer them the most suitable products. Through the use of big data and our own digital data models, the bank has been able to increase new lending while dramatically reducing fraud. Over the past year, the level of overdue debt decreased by 0.9 percentage points. to 3.4% (as of June 30, 2021). The cost of risk against the backdrop of declining delinquencies decreased to 0.2% in the first half of 2021 from 5.2% in the same period of 2020.
The development of digital business continues: 80% of our active clients use the Home Credit mobile application every month. More than half of repeat sales come entirely from online channels. In addition, more than 50% of customer requests are processed by the chatbot, and after 75% they do not seek a second consultation, which indicates the high quality of the response received. Also, the bot “learned” to offer loan products: the volume of monthly sales already reaches 40 million rubles.
The success of Home Credit Bank has been marked by a number of important industry awards: the second place in the rating of the best Russian banks by The Banker, the top 3 banks with the fastest and most convenient cash loans by Markswebb, the global rating of the best banks by FORBES and many others. The Credit Benefit Card won first place in the Best Loyalty Credit Card category at the 2021 Frank Cards & Reward Award.
“New strategic initiatives have already begun to bring noticeable results. A clear focus on customer needs and an agile approach to key products have allowed the bank to become one of the leading players in the market. We were able to reduce the time required to implement new developments by a significant amount - 58%. Investments in artificial intelligence in risk management have made it possible to dynamically increase the loan portfolio with a declining risk level. In addition, we are actively developing the ESG component of the business. For example, in the summer we launched three campaigns to support vaccination against covid-19, to which 12 thousand people responded. 26% were vaccinated directly during the campaigns. This approach enhances our competitiveness and lays the foundation for further growth,” commented Dmitry Peshnev-Podolsky, Chairman of the Board of Home Credit Bank.
LLC Home Credit and Finance Bank [Fitch BB-, Expert RA ruA-, ACRA A (RU)] specializes in providing retail banking services in Russia and Kazakhstan. Home Credit Bank offers its customers a wide variety of loan products and banking services. The bank's client base totals 40.9 million people. Products and services are presented in almost 120 thousand partner stores in Russia and Kazakhstan. As of June 30, 2021, the bank's distribution network consisted of 253 offices, 214 post offices, and also included 1,336 ATMs and payment terminals in Russia and Kazakhstan.
Additional information is available at www.homecredit.ru, www.homecredit.kz
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