Financial results of Future Non-state Pension Fund for nine months of 2017 (up to 30 september 2017)
7 November 2017. FUTURE Non-state Pension Fund (“the Fund" or "FUTURE"), a non-government pension fund mainly providing compulsory pension insurance services and a part of FUTURE Financial Group, has announced financial results for nine months of 2017 (the period ending 30 September 2017), prepared in accordance with industry accounting standards.
OPERATIONAL AND STRATEGIC OBJECTIVES
• As of 30 September 2017 the assets of FUTURE had increased by 13% or RUB 33.4 billion from 31 December 2016 and amounted to RUB 296.4 billion. This includes an increase of assets under management by 13% or RUB 32. 9 billion to RUB 294.6 billion. Asset growth was mainly due to a successful campaign in 2016 to encourage transfer of pension savings to the Fund.
• FUTURE is continuing its work to attract new insurees and targets for new business have been achieved in the course of 2017. The main channels for attracting new customers are FUTURE’S own network and the networks of business partners. The Fund is primarily focused on attracting business from Russians who have not yet placed their pension savings.
• At the end of the third quarter of 2017, VTB Bank implemented an individual transaction solution for FUTURE, enabling payments to be made to pensioners using the payment register.
• The Fund is working to establish strong channels of communication with its 4.5 million clients, exploring their needs and preferences in order to offer the best service quality on the market. The Fund regularly updates its clients about important Fund events, products and services, and warns of potential loss of accumulated investment income in case of early transfer of savings.
• The Fund is installing high-quality electronic services and developing remote service channels. In the third quarter of 2017, the updated online personal account service was launched with an improved interface and enhanced functionality.
• FUTURE entered the RBC rating of Russia’s 500 largest companies in September 2017, taking third place by asset value among eight non-state pension funds included in the rating. FUTURE stands 213th in the overall rating, 206th by profits and 84th by asset value.
KEY INDICATORS IN 9M 2017
• Revaluation of financial assets in Q3 2017 led to a cumulative loss of RUB 2.7 billion for 9M 2017. The Fund showed a RUB 0.9 billion loss on its investments in 9M 2017.
• The loss was mainly due to fall in value of the shares of Otkrytiye Financial Corporation and the insurance company Rosgosstrakh in Q3 2017. Excluding these effects, Fund profit before tax in 9M 2017 would be RUB 3 billion and profit on investments would be RUB 4.6 billion.
• FUTURE’s share portfolio outperformed the MICEX Index in 9M 2017. The Index lost 9% of its value over nine months, while the Fund portfolio grew by 10.5% excluding the effect of decline in value of shares of Otkrytiye Bank (the decline was caused by steps taken by Russian Central Bank in respect of the Bank) and by 4% including this effect.
• Contributions under compulsory pension insurance contacts grew by 31% year-on-year in 9M 2017 (by RUB 9.7 billion) to RUB 41.2 billion and non-state pension contributions grew by 35% (RUB 10.5 million) to RUB 40.4 million.
• FUTURE had 4.5 million clients at the end of September 2017 (4.4 million under compulsory pension insurance contracts and 75,500 in non-state programmes).
• The balance of cash and cash equivalents at the end of the reporting period was RUB 11.6 billion.
Note: The distribution of investment income to the accounts of insurees and to shareholders is based on results for the calendar year and will be reflected in the annual accounts of FUTURE Fund. The 9M result does not include these distributions and is of an interim nature.
Commentary by Nikolai Sidorov, CEO of FUTURE Non-state Pension Fund:
"FUTURE Fund pursued its business strategy successfully in 9M 2017. As well as attracting new insurees, we developed a number of new products and services for our clients, including an individual pension plan and servicing of existing compulsory insurance contracts in banks. We also updated our online personal account service for insurees. Functionality of the personal account now matches that available to financial service users.
“Fund results in 9M 2017 were significantly affected by the situation around Otkrytiye Bank, which caused us a moderate loss of value. We expect that, if the regulator does not alter its approach in respect of Otkrytiye Bank, in particular, if its continues with plans to write-off the Bank's capital, we will experience further negative effect from this factor at least until the end of 2017. The possible write-off of shares in Otkrytiye Bank will not be critical for the stability and future performance of our Fund, but it will certainly have strategic implications for development of the non-state pension market."
EVENTS AFTER THE REPORTING DATE
• In October 2017 FUTURE Fund launched servicing of mandatory pension insurance contracts at URALSIB Bank, Previously clients were only able to register their contract. Now a client who already has an active contract with the Fund can apply to a URALSIB branch for the arrangement of a lump-sum payment, urgent pension payment, payments to heirs and also to update their personal data and bank details.
• On 12 October 2017 FUTURE Fund filed an official complaint with the Central Bank of the Russian Federation regarding illegal actions by TRUST Bank connected with the acquisition by TRUST of shares of Otkrytiye Bank and non-performance of the resulting obligation to make a public offer to buy the voting shares of other shareholders of Otkrytiye Bank. The complaint was also addressed to TRUST Bank.
• On 26 October 2017 FUTURE Fund brought an action against TRUST Bank in the Moscow Commercial Court. The subject of the action is the recovery of losses caused by failure to carry out a compulsory share purchase offer under Article 84.2 of the Federal Law on Joint Stock Companies.
The full text of the interim financial statements of FUTURE Non-state Pension Fund, prepared in accordance with industry accounting standards for nine months of 2017, ending 30 September 2017, is disclosed on the website of FUTURE Fund at https://futurenpf.ru/about-fund/official-information/#information-disclosureFurther information is available on the website of Future Fund (https://futurenpf.ru/).
FUTURE Non-state Pension Fund, a non-government pension fund mainly providing compulsory pension insurance services and a part of FUTURE Financial Group, has announced financial results for nine months of 2017 (the period ending 30 September 2017), prepared in accordance with industry accounting standards.
Public Joint-Stock Company Future Financial Group (MOEX: FTRE) (hereinafter - the Company or the Group), the public company unifying several of the largest non-state pension funds in Russia, announces the unaudited financial results of the Group for H1 2017, which ended on June 30, 2017
- Providing the conditions for assets growth
- Developing of competitive and stable business
- Offering high-quality products and services