30 Segment Analysis
For the purposes of management the Group is divided into operating segments of activity - central head office,17 regional head offices and subsidiaries - which are defined on the basis of organizational structure of the Group and geographical areas. The principal activity of all operating segments is banking operations. For the purposes of presentation in these consolidated financial statements the operating segments are aggregated in the following reportable segments:
Moscow
this segment includes the following:
- Central head office of the Group,
- Regional head office of Moscow,
- Subsidiaries of the Group located in the region.
Central and Northern regions of European part of Russia
this segment includes the following: Regional head offices:
- Severny -Yaroslavl,
- Severo-Zapadny - Saint-Petersburg,
- Tsentralno-Chernozemny - Voronezh,
- Srednerussky - Moscow;
- Subsidiaries of the Group located in the region.
Volga region and South of European part of Russia
this segment includes the following: Regional head offices:
- Volgo-Vyatsky - Nizhniy Novgorod,
- Povolzhsky - Samara,
- Severo-Kavkazsky - Stavropol,
- Yugo-Zapadny - Rostov-on-Don, Subsidiaries of the Group located in the region.
Ural, Siberia and Far East of Russia
this segment includes the following:
Regional head offices:
- Zapadno-Uralsky -Perm,
- Uralsky - Ekaterinburg,
- Sibirsky - Novosibirsk,
- Zapadno-Sibirsky -Tumen,
- Severo-Vostochny - Magadan,
- Dalnevostochny - Khabarovsk,
- Vostochno-Sibirsky - Krasnoyarsk,
- Baikalsky -Irkutsk,
Subsidiaries of the Group located in the region.
Other countries
this segment includes the following:
- Subsidiaries located in Ukraine,
- Subsidiaries located in Kazakhstan,
- Subsidiaries located in Belarus,
- A branch office in India.
The Management of the Group analyses operating results of every segment of activity for the purposes of making decision about allocation of resources and assessment of segments' business results. The segments' reporting and operating results which are provided to the Management of the Group for analysis are prepared under Russian accounting standards,except the segments' reporting of the subsidiaries which is prepared under International Financial Reporting Standards.
Intersegment operations are performed on the basis of internal transfer pricing rates which are established, approved and regularly revised by the Management of the Group.
The subsidiaries' activity is controlled by the Group integrally.
Segment reporting of the Group's assets and liabilities as at 31 December 2010 is as follows:
In millions of Russian Roubles | Moscow | Central and Northern regions of European part of Russia | Volga region and South of European part of Russia | Ural, Siberia and Far East of Russia | Other countries | Total |
---|---|---|---|---|---|---|
TOTAL ASSETS | 4,318,256 | 1,445,164 | 1,163,282 | 1,548,746 | 185,817 | 8,661,265 |
TOTAL LIABILITIES | 2,885,376 | 1,776,676 | 1,270,092 | 1,549,502 | 146,145 | 7,627,791 |
Segment reporting of the Group's assets and liabilities as at 31 December 2009 is as follows:
In millions of Russian Roubles | Moscow | Central and Northern regions of European part of Russia | Volga region and South of European part of Russia | Ural, Siberia and Far East of Russia | Other countries | Total |
---|---|---|---|---|---|---|
TOTAL ASSETS | 3,339,279 | 1,269,638 | 1,037,696 | 1,438,970 | 110,590 | 7,196,173 |
TOTAL LIABILITIES | 2,497,326 | 1,455,172 | 1,024,070 | 1,276,215 | 85,934 | 6,338,717 |
Reconciliation of assets and liabilities as per the reportable segments with the Group's assets and liabilities under IFRS as of 31 December 2010 and 31 December 2009 is as follows:
Total assets | Total liabilities | |||
---|---|---|---|---|
In millions of Russian Roubles | 2010 | 2009 | 2010 | 2009 |
Total amount per segment information | 8,661,265 | 7,196,173 | 7,627,791 | 6,338,717 |
Adjustment of provisions | 55,642 | 23,660 | (19,765) | (25,441) |
Additional interest accrued on loans | 1,889 | 6,510 | (924) | - |
Deferred commission income on loans | (28,753) | (30,696) | 388 | - |
Deferred commission income on guarantees | - | - | 1,135 | 796 |
Accounting for derivatives at fair value | 4,749 | 619 | 3,867 | 10,576 |
Adjustment of depreciation and cost or revalued amount of premises and equipment including effect of deferred tax | (68,145) | (64,013) | (952) | |
Staff expenses accrued for the year (bonuses, annual leave, pension liabilities) | 184 | 155 | 14,831 | 12,383 |
Adjustment of amortised cost and partial repurchase of other borrowed funds and subordinated debt | (115) | (24,324) | (292) | (24,866) |
Adjustment of income tax | - | (668) | 7,018 | 12,924 |
Other adjustments | 1,811 | (2,350) | 8,263 | 1,041 |
The Group's total amount under IFRS | 8,628,527 | 7,105,066 | 7,641,360 | 6,326,130 |
Segment reporting of the Group's income and expenses for the year ended 31 December 2010 is as follows:
In millions of Russian Roubles | Moscow | Central and Northern regions of European part of Russia | Volga region and South of European part of Russia | Ural, Siberia and Far East of Russia | Other countries | Total |
---|---|---|---|---|---|---|
Interest income | 296,580 | 153,262 | 132,496 | 179,334 | 14,935 | 776,607 |
Interest expense | (117,168) | (69,627) | (48,327) | (58,576) | (6,706) | (300,404) |
Inter-segment (expense)/income | (46,536) | 31,180 | 9,875 | 5,481 | - | - |
Fee and commission income | 23,975 | 35,992 | 27,727 | 38,840 | 3,927 | 130,461 |
Fee and commission expense | (2,584) | (1,404) | (1,027) | (2,160) | (680) | (7,855) |
Net gains arising from securities | 21,553 | 6 | 84 | 21,643 | ||
Net (losses)/gains arising from trading in foreign currencies, operations with foreign currency derivatives and foreign exchange translation gains/(losses) | (780) | 3,237 | 1,858 | 2,464 | 1,847 | 8,626 |
Net (losses)/gains arising from operations with precious metals | (1,767) | 624 | 524 | 901 | (314) | (32) |
Other net operating (losses)/gains | 6,162 | 256 | (7,551) | (1,604) | 282 | (2,455) |
Operating income before provision charge for loan impairment | 179,435 | 153,526 | 115,575 | 164,680 | 13,375 | 626,591 |
Net provision charge for loan impairment | (36,570) | (43,466) | (42,907) | (32,413) | (3,709) | (159,065) |
Operating income | 142,865 | 110,060 | 72,668 | 132,267 | 9,666 | 467,526 |
Operating expenses | (63,996) | (64,780) | (56,640) | (78,154) | (6,596) | (270,166) |
Profit before tax (Segment result) | 78,869 | 45,280 | 16,028 | 54,113 | 3,070 | 197,360 |
Other disclosures | ||||||
Capital expenditure incurred (additions of fixed assets) | 9,884 | 17,133 | 11,010 | 14,970 | 1,588 | 54,585 |
Depreciation of premises and equipment | (3,809) | (6,384) | (4,944) | (7,234) | (474) | (22,845) |
Segment reporting of the Group's income and expenses for the year ended 31 December 2009is as follows:
In millions of Russian Roubles | Moscow | Central and Northern regions of European part of Russia | Volga region and South of European part of Russia | Ural, Siberia and Far East of Russia | Other countries | Total |
---|---|---|---|---|---|---|
Interest income | 283,307 | 158,189 | 136,779 | 193,338 | 4,906 | 776,519 |
Interest expense | (147,947) | (62,517) | (44,436) | (56,394) | (1,925) | (313,219) |
Inter-segment income/(expense) | 19,159 | 13,491 | (9,411) | (23,239) | - | - |
Fee and commission income | 35,219 | 37,867 | 31,121 | 42,990 | 1,118 | 148,315 |
Fee and commission expense | (3,377) | (196) | (341) | (371) | (164) | (4,449) |
Net gains arising from securities | 17,389 | 6 | 17,395 | |||
Net gains arising from trading in foreign currencies, operations with foreign currency derivatives and foreign exchange translation gains | 13,313 | 4,278 | 3,342 | 2,580 | 726 | 24,239 |
Net (losses)/gains arising from operations with precious metals | (535) | 847 | 691 | 1,223 | - | 2,226 |
Impairment of assets | (3,062) | - | - | - | - | (3,062) |
Other net operating (losses)/gains | (13,803) | (506) | (501) | (306) | 947 | (14,169) |
Operating income before provision charge for loan impairment | 199,663 | 151,453 | 117,244 | 159,821 | 5,614 | 633,795 |
Net provision charge for loan impairment | (129,957) | (65,653) | (70,918) | (93,263) | (6,798) | (366,589) |
Operating income/(expense) | 69,706 | 85,800 | 46,326 | 66,558 | (1,184) | 267,206 |
Operating expenses | (61,458) | (50,932) | (47,242) | (64,170) | (2,123) | (225,925) |
Profit/(loss) before tax (Segment result) | 8,248 | 34,868 | (916) | 2,388 | (3,307) | 41,281 |
Other disclosures | ||||||
Capital expenditure incurred (additions of fixed assets) | 9,403 | 10,623 | 9,551 | 12,483 | 1,325 | 43,385 |
Depreciation of premises and equipment | (3,494) | (4,775) | (4,283) | (6,742) | (466) | (19,760) |
Reconciliation of profit before tax, interest income and expense, fee and commission income, gains from operations with securities and gains from operations with foreign currencies for the reportable segments with the Group's income statement items under IFRS for the year ended 31 December 2010 as follows:
In millions of Russian Roubles | Profit before tax | Interest income | Interest expense | Fee and commission income | Net gains/ (losses) arising from operations with securities | Net gains arising from trading in foreign currencies, operations with foreign currency derivatives and foreign exchange translation gains |
---|---|---|---|---|---|---|
Total amount per reportable segment | 197,360 | 776,607 | (300,404) | 130,461 | 21,643 | 8,626 |
Adjustment of provisions | 28,789 | - | - | - | - | - |
Staff expenses accrued for the year (bonuses, annual leave, pension liabilities) | (3,024) | - | - | - | - | - |
Differences arising on reporting of fee and commission income and expense | 1,516 | 17,589 | - | 347 | - | (5,536) |
Differencies arising on securities classification | 3,413 | 1,202 | - | - | 2,176 | 35 |
Accounting for derivatives at fair value | 13,549 | - | - | - | - | 11,224 |
Additional interest accrued on loans | (4,620) | 1,094 | - | - | - | - |
Adjustment of depreciation and cost or revalued amount of premises and equipment | (4,434) | - | - | - | - | - |
Adjustment of amortised cost and partial repurchase of other borrowed funds | (456) | (675) | 482 | (378) | 218 | 49 |
Other adjustments | (1,958) | (171) | 97 | 519 | (67) | (326) |
The Group's total amount under IFRS | 230,135 | 795,646 | (299,825) | 130,949 | 23,970 | 14,072 |
Reconciliation of profit before tax, interest income and expense, fee and commission income, gains from operations with securities and gains from operations with foreign currencies for the reportable segments with the Group's income statement items under IFRS for the year ended 31 December 2009 as follows:
In millions of Russian Roubles | Profit before tax | Interest income | Interest expense | Fee and commission income | Net gains/ (losses) arising from operations with securities | Net gains arising from trading in foreign currencies, operations with foreign currency derivatives and foreign exchange translation gains |
---|---|---|---|---|---|---|
Total amount per reportable segment | 41,281 | 776,519 | (313,219) | 148,315 | 17,395 | 24,239 |
Adjustment of provisions | 1,274 | - | - | - | - | - |
Staff expenses accrued for the year (bonuses, annual leave, pension liabilities) | (1,407) | - | - | - | - | - |
Differencies arising on securities' classification | 18,946 | 351 | - | - | 19,011 | (585) |
Accounting for derivatives at fair value | (8,376) | - | - | - | - | (7,294) |
Additional interest accrued on loans | (394) | (394) | - | - | - | - |
Differences arising on reporting of fee and commission income and expense | (2,584) | 39,726 | - | (42,310) | - | - |
Adjustment of depreciation and cost or revalued amount of premises and equipment | (17,485) | - | - | - | - | |
Adjustment of amortised cost and partial repurchase of other borrowed funds and subordinated debt | 697 | (1,595) | 720 | - | - | (118) |
Other adjustments | (2,088) | 355 | 254 | (282) | 57 | (14) |
The Group's total amount under IFRS | 29,864 | 814,962 | (312,245) | 105,723 | 36,463 | 16,228 |
The differences shown above arise from classification variances as well as different accounting policies.
Adjustment of provisions is related to the difference between estimation methodology applied in statutory accounting records used as a basis for management reporting and estimation methodology according to IFRS.
Differences arising on securities' classification relate to gains/(losses) on revaluation of securities designated at fair value through profit or loss in IFRS reporting but classified as available for sale in statutory accounting records used as a basis for management reporting.
For the year ended 31 December 2010 the Group's revenues from customers in the Russian Federation amounted to RR 960 441 million (for the year ended 31 December 2009: RR 979 859million). Revenues from customers in all foreign countries from which the Group derives revenues amounted to RR 20 954 million (for the year ended 31 December 2009: RR 7 703 million).
As at 31 December 2010 the carrying value of premises and equipment located in the Russian Federation amounted to RR 276 827 million (2009: RR 243 752 million). Carrying value of premises and equipment of the Group located in foreign countries amounted to RR 6 929 million (2009: RR 6 129 million).
No revenue from transactions with a single external customer or counterparty amounted to 10% or more of the Group's total revenue in 2010 or 2009.