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The lender says it has currency losses on paper, but they come from revaluing assets, not expenses from trading.
Gazprombank reported losses of 15.5 billion rubles ($529 million) after the ruble strengthened in September, its worst month this year, but a spokesman said the damage was only on paper and that it has earned more than 24 billion rubles in 2009.
The results were the sixth time this year that Gazprombank has posted a monthly loss. The previous worst month was May, when the bank lost 8.4 billion rubles.
The lender's losses are coming from currency deals, said Maxim Osadchy, an analyst at Bank of Corporate Financing. Gazprombank's foreign-currency assets exceeded its foreign-currency liabilities by 392.6 billion rubles as of Oct. 1. According to official Central Bank exchange rates, the ruble strengthened against the dollar 1.1 percent in September and against the euro by 3.4 percent.
The September results are a consequence of the strengthening ruble, a bank spokesperson said. But the bank did not suffer any real losses since the changes were a result of exchange-rate shifts and related revaluations of foreign-currency assets — not expenses from currency operations.
Gazprombank suffered from exchange-rate changes last year as well. According to the bank's full-year results to international financial reporting standards, it had a record loss of 68.2 billion rubles. The losses were from the bank's futures contracts for currency, which were worth 96.9 billion rubles, according to the results, including 75.8 billion rubles in downward revaluations because of the ruble devaluation and falling securities prices.
At the time, a bank spokesman said the risks were hedged but that because of the way the figures for the cash transactions and futures contracts show up in its results, there was an accounting loss of 33 billion rubles under international financial reporting standards. bank would have additional profit of the same amount in the following reporting period, he said.
In the first quarter of 2009, the bank made 8.1 billion rubles on currency operations, and a total of 16.5 billion rubles.
Gazprom owns 41.7 percent of the lender, while its pension fund, Gazfond, owns 50 percent. As of the first quarter of 2009, the lender was Russia's third-largest, with assets of 2.05 trillion rubles.
All of Gazprombank's operations are hedged now, as well, and the company doesn't have currency risks, deputy chief Alexander Sobol said. These transactions, as well as the profit from them, are not included in the balance, he said.
The bank's international financial reporting will be more telling, with a profit of 24 billion rubles in the first half and even more for the first nine months, the spokesman said. Even the company's nine-month profit of 16 billion rubles under Russian reporting standards wasn't bad, he said.
VTB Group, which is larger than Gazprombank by assets, had net profit of 7.9 billion rubles in the first nine months, while gained 7.4 billion rubles in the first eight months of the year.
