Société Générale’s purchase of a controlling stake of 50% plus one share, closed in February 2008, has provided crucial support, in terms of both capital and management expertise.
On the financial side, profits were up 61.5% in 2007, at Rbs6.1bn ($222.8m), generating a return on equity of 18.6%. Société Générale extended seven to 10-year subordinated loans worth almost $270m into Rosbank, in addition to a share offering in mid-2007 that raised $258m.
This has given the bank a reasonable liquidity cushion, and allowed continued expansion of credit activities, leading to a 47% rise in the loan portfolio and 38.9% rise in total assets – to Rbs408bn – in 2007. Moreover, with net interest income accounting for a 71% share of total operating income in 2007, the bank should also be better positioned than many of its peers to weather the rollercoaster ride on Russian markets since mid-2008.
A special mention from the judges also goes to 100% state-owned Russian Agricultural Bank (Rosselkhozbank), which as a key tool of government policy to develop the country’s rural economy enjoyed a remarkable 447% increase in net profits in 2007, to $177m.
