Sberbank releases Financial Highlights for 5M 2018 (under RAS; non-consolidated)
Please note that the numbers are calculated in accordance with Sberbank`s internal methodology. Effective January 1, 2018 the methodology has been updated. For comparison purposes the numbers for 2017 have been calculated in accordance with the updated methodology.
Key highlights for May 2018:
- The Bank earned about RUB67 bn in net profit in May;
- The Bank granted over RUB1.1 trln in loans to corporate and over RUB270 bn to retail clients in May;
- Expansion of loan portfolio continued in May: +1.3% in the corporate segment and +2.1% in retail;
- Net fee and commission income grew 23.7% as compared to 5M 2017.
Deputy Chairman of Sberbank Alexander Morozov stated:
“The Bank sees robust growth in fees and commission income – up by 23.7% for 5 months. Our credit-related business is developing well – loan portfolio expanded by 6.5% for corporate clients and by 9.1% for retail clients. These factors together provide for high profitability of business: ROE stood at 22.6% and cost to income ratio at 28.3% for 5M 2018.”
Comments for 5M 2018:
Net interest income increased by 7.2% compared to 5M 2017 and totaled RUB510.9 bn. The increase was due to expanding working assets and lower cost of client funds.
Net fee and commission income grew by 23.7% to RUB164.9 bn, with main drivers being income from operations with bank cards and acquiring (+31.8%), settlement transactions (+21.2%) and fees from insurance products (+52.7%).
Operating expenses increased by 9.4%, which was slower than growth in operating income before provisions (+13.0%). The transition to a more even allocation of accrued expenses throughout the year is under way. Cost-to-income ratio for 5M 2018 improved by 0.9 p.p. year on year to 28.3%.
Provision charges for 5M 2018 amounted to RUB110.8 bn, which was 7.0% lower as compared to the same period a year ago. As of June 1, 2018, loan-loss provisions were 2.6 times the overdue loans.
Net profit before income tax came at RUB416.4 bn for 5M 2018, while net profit totaled RUB328.8 bn, including about RUB67 bn earned in May.
Total assets increased by 0.7% in May to RUB24.3 trln, mainly driven by both corporate and retail loan portfolio growth.
The Bank lent over RUB1.1 trln to corporate clients in May, and RUB5.6 trln year to date. This is 1.6-times the amount issued for 5M 2017. The corporate portfolio added 1.3% in May or 6.5% year to date to RUB12.8 trln as of June 1, 2018.
The Bank granted over RUB270 bn in loans to retail clients in May – thus, the volume of issuances remains high for the last several months. Loans issued for 5M 2018 totaled about RUB1.2 trln, or 1.7-times the amount issued for 5M 2017. Retail loan portfolio was up by 2.1% in May and 9.1% year to date, amounting to RUB5.4 trln as of June 1, 2018.
The share of overdue loans in total loan portfolio remained unchanged at 2.4%, which is substantially below that of average for the banking sector (8.6% excl. Sberbank as of May 1, 2018).
Securities portfolio increased by 2.5% to RUB2.7 trln in May, mainly as a result of purchases of short-term bonds.
Corporate deposits and accounts in May increased by 0.9% to RUB6.0 trln. Retail deposits and accounts decreased by 0.7% to RUB12.2 trln.
In addition, the Bank made another issuance of exchange-traded bonds in the amount RUB40 bn with 5-years maturity and coupon rate at 7,2%. The spread to OFZ for the new issuance narrowed to 43 bps as compared to the previous issuance.
Core Tier 1 and Tier 1 capital (equal since Sberbank does not have instruments of additional capital) totaled RUB3,080 bn as of June 1, 2018, under preliminary calculations. Total capital amounted to RUB4,027 bn. Net profit was the primary source of capital growth in May.
Risk-weighted assets increased by RUB0.2 trln to RUB25.2 trln, mainly due to the increase in lending volumes.
Capital adequacy ratios as of June 1, 2018 under preliminary calculations were:
- N1.1 – 12.2% (minimum adequacy level, required by the Central Bank of Russia at 4.5%)
- N1.2 – 12.2% (minimum adequacy level, required by the Central Bank of Russia at 6.0%)
- N1.0 – 16.0% (minimum adequacy level, required by the Central Bank of Russia at 8.0%).