25 September 2019
Renaissance Capital posts steady financial performance in 1H19
  • Net profit consistent YoY at $8.0mn
  • Operating income steady YoY at $78.5mn
  • Equity-to-assets ratio at 11.6% 
  • Total assets and equity at $3.3bn and $386mn, respectively

 

Renaissance Capital, a leading emerging and frontier markets investment bank, today announced its IFRS financial results for the six months ended 30 June 2019.

During the reporting period, net profit remained largely in line with last year at $8.0mn. Operating income was steady and came in at $78.5mn, with the overall revenue pool well diversified across the businesses, such as cash equities, bonds, derivatives and investment banking.

Renaissance Capital’s operating expenses were under control and amounted to $66.1mn. The Firm continued to adhere to a prudent cost-control strategy.

The Firm’s equity-to-assets ratio remained strong at 11.6%. Total assets and equity amounted to $3.3bn and $386mn, respectively, as of 30 June 2019.

In 1H19, Renaissance Capital showed consistent performance across its core businesses. On the investment banking front, the Firm led 18 capital markets transactions with a total value of $4.6bn. The majority of transactions were executed in debt capital markets, where Renaissance Capital maintains strong positions having secured consecutive mandates, particularly in Eastern Europe and the FSU universe.

Landmark transactions in 1H19 include, among others:

  • $450mn 9.50% 5-year Reg S / 144A debut benchmark offering and an additional $50mn Reg S only tap for Ecobank, a leading Pan-African bank with operations in 33 African countries
  • $700mn 5-year benchmark bond issue for Evraz, an FTSE100 company and one of the blue-chip EM issuers
  • Debut 144A/Reg S $300mn high-yield bond offering for TransOil – the first public capital raising out of Moldova
  • A new $500mn 5.95% benchmark bond issue for GTLK / STLC – a highly successful return to the market for the company;
  • $125mn convertible bond issue for Petropavlovsk, an LSE-listed gold company – a successful return of Petropavlovsk to the markets since 2017 and the only convertible issuer out of the region rated below BB
  • EUR50mn 10% 5.5-year subordinated unsecured eurobond issue for Renaissance Credit, a challenging transaction in which Renaissance Capital acted as a Sole Lead Manager and Bookrunner and covered all workstreams
  • A debut $300mn international 144(A) / Reg S bond issue and debut $125mn additional tier 1 issue for TBC Bank – the largest ever amount issued by a Georgian bank in AT1 format
  • $1.25bn 5.15% 7-year benchmark offering for Gazprom – a record-breaking capital markets return

In 1H19, Renaissance Capital’s M&A team had a successful start to the year and completed, among other deals, a complex transaction involving two LSE-listed Russian companies – a $460mn acquisition of 25% in Etalon Group PLC and the simultaneous sale of 51% in Leader-Invest by Sistema.

Ruslan Babaev, Co-CEO, Renaissance Capital, commented: “Renaissance Capital is well known for expanding the emerging and frontier markets universe via debut investment stories. We remain committed to our core markets and continue to open new ones for investors from all over the world. With a strong track record and pipeline of transactions, we have recently put significant regions on investors’ radar, such as Belarus, Moldova, Kazakhstan, Uzbekistan, Georgia and Armenia. This has allowed us to execute more capital markets transactions and as a result diversify our revenue mix, achieving a strong balance between trading and investment banking operations.

“Our strong foothold in the FSU space translated into #1 position in arranging eurobond issues in the FIG sector by issues and #2 by volume[1]. We also continued to develop our FICC operations. In June 2019, we launched our FICC desk in Kenya, as we have observed continued improvements in FICC activity with most investors increasing their allocations in this segment. We remain committed to Africa as one of our core markets and the landmark transaction for Ecobank once again demonstrates the high quality and strong investor appetite for African credit.

Anna Vyshlova, Co-CEO, Renaissance Capital, added: "In the first half of the year, Renaissance Capital consolidated its market positions and enhanced its focus on diversification and balance. This was achieved, among other things, via our consistent approach to talent management and hiring, where we encourage personnel growth in-house and select the best professionals from the market. Our most notable hires in 1H19 include: Risana Zitha, Head of Investment Banking, Africa; Nancy Adel Fahmy, Vice President, Financial Services Research and Omar Gaafar, Vice President, Investment Banking, in Cairo; Uwana Ekpat, Vice President, Equity Sales, in Lagos, and Winnie Towett, FICC Trader, in Nairobi. We were also pleased to welcome back Petr Molchanov, Head of Investment Banking, Russia and CIS, and Alexander Vengranovich, Director, Telecoms Research in our Moscow office, as well as Bobby Dixon, Director, Equity Trading, in Cape Town.

"Our consistent approach to talent and continuous focus on core markets have brought us several important industry awards. In 2019, our Africa research team delivered an outstanding performance in the 2019 Financial Mail Top Analyst Awards, where every single one of Renaissance Capital’s South Africa and Sub-Saharan Africa analysts was rated in the Top 3. Furthermore, Renaissance Capital was voted #2 Frontier Markets Brokerage House in the 2019 Extel Survey and our Global Chief Economist Charles Robertson was ranked #1 Frontier Markets Analyst for the fourth consecutive year. On the investment banking side, we were the winners of the DealMakers Africa 2018 award in two categories – General Corporate Finance: Financial Advisors (Transaction Value) East Africa, and General Corporate Finance: Financial Advisors (Transaction Flow) East Africa. We were also pleased to be named #1 Most Impressive Local Bank for CEE Bonds in 2018 by GlobalCapital. We are proud of our award-winning teams and look forward to more achievements in the future.”

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[1] According to Cbonds ranking , 1H19