Time of Victories

7. Major Financial Performance Results

Major Financial Performance Results (as of 01.01.2021)

 (RUB’000)
  
Equity (capital)73 302 615
Net income, total23 681 945
Operating expenses1 680 385
Profit before tax22 001 560
Accrued (paid) taxes4 206 325
Profit after tax17 795 235

Dynamics of Changes in Financial Performance Results (RUB’000)

Table 8.

IndicatorsChange 2020/201920202019
Interest income, total-14%168 585 484195 533 800
Interest expenses, total-16%

158 345 158

188 395 395
Net interest income from transactions with financial assets assessed at the fair value via profits or losses-90%830 5388 137 840
Fee and commission income27%14 606 51311 489 736
Fee and commission expenses76%438 846249 301
Net income (expenses)9%23 681 94521 783 279
Operating expenses6%1 680 3851 589 180
Profit (loss) before tax9%22 001 56020 194 099
Tax refund (expense)8%4 206 3253 891 483
Profit (loss) for reporting period9%17 795 23516 302 616

Dynamics of Changes in Equity (Capital) of NCC and Its Major Indicators
Included in the Capital Calculation (RUB’000)

NCC manages its capital on the going concern assumption, with the view to the need to maintain the necessary balance between ensuring financial sustainability in any economic conditions of its business functioning, reduction of market participants’ costs, and the high level of return on investment for shareholders.

During the reporting period, NCC managed its capital subject to the objectives set by Moscow Exchange Group’s Strategy for 2016-2020 with regard to development of the centralized clearing and improvement of the reliability of the central counterparty.

Considering the need to comply with the regulatory requirements for the capital of credit institutions, the Company forecasted its capital amount based on the estimated volume of transactions on the on-exchange markets of the Group and the amount of funds deposited by clearing members to secure performance of obligations under trades and also subject to the size of risks assumed by it in connection with implementation of the top-priority projects of Moscow Exchange involving performance of centralized clearing via CCP.

When forecasting the amount and adequacy of its capital, NCC was also taking account of the scheduled dividend payments in accordance with the Group’s dividend policy.

Table 9.

Item

01.01.2021 (RUB’000)

01.01.2020 (RUB’000)

Equity (capital), total

73 302 615

70 580 566

Including:

  

CET1 Capital

55 347 433

54 321 547

Tier 1 capital

55 347 433

54 321 547

Tier 2 Capital

17 955 182

16 259 019

All capital adequacy requirements were met by NCC in full during the reporting period.

Dedicated Capital of CCP
On 1 November 2015, the Bank of Russia put into effect the amendments to its regulations governing the central counterparty’s activity, which require CCP to set aside a part of its equity (capital) to cover possible losses, whether or not caused by clearing members’ non-performance of their obligations. CCP’s funds intended to cover losses, which have been allocated in compliance with the applicable laws, regulations of the Bank of Russia, are recorded separately on separate personal accounts for recording retained earnings. The above funds are included in the central counterparty’s equity (capital).

Table 10.

Part of Retained Earnings Intended: 2020 (RUB’000) 2019 (RUB’000)
to cover possible losses caused by failure of clearing members to perform their obligations (funds used by central counterparty before using the funds contributed by non-defaulting clearing members to the collective clearing collateral) – the central counterparty’s dedicated capital 10 100 000 10 100 000
to insure termination and restructuring of the central counterparty’s activities 794 590 690 479
to cover possible losses as a result of deterioration of the central counterparty’s financial position due to the reduction of its income or increase of its expenses, other than resulting from failure of clearing members to perform their obligations 397 295 345 240