Sberbank releases Financial Highlights for 2 months of 2020 (under RAS; non-consolidated)

Mar 06, 2020

The numbers are calculated in accordance with Sberbank`s internal methodology.

Please note that some minor changes became effective in Sberbank’s internal methodology starting from January 1, 2020. Therefore, the numbers for 2019 have been recalculated to make them comparable.

The effect of subsequent events is excluded from the numbers as of January 1, 2020.

Key highlights for February 2020:

  • The Bank earned RUB76.4 bn;
  • Total loan production hit a record for February, including RUB285 bn to retail clients and RUB1.2 trn to corporate clients;
  • Client deposits and accounts increased by 2.3% for the month.

Deputy Chairman of Sberbank Alexander Morozov stated:

“Real growth of the corporate and retail loan portfolios along with an increase of fee income led to higher profitability. The start of implementation of the new IRB models for the credit risk assessment of mortgages and the introduction of regulatory classification criteria for project financing were noticeable developments in February. This benefited our capital adequacy despite the increased volatility on the financial markets”

Comments for 2M 2020:

Net interest income increased by 10.7% as compared to 2M 2019 and amounted to RUB216.2 bn. The increase was driven by retail loan portfolio expansion and gradual decline in the cost of funding.

Net fee and commission income was up by 14.1% to RUB72.3 bn. The largest contributors to fee income growth were operations with bank cards and settlement transactions for corporate clients, benefiting from the Bank’s initiatives in 2H2019 to support these business activities.

Operating expenses increased by 8.5% y/y, which owned mainly to expenditures related to the digital platform: development, licenses, amortization of equipment. Furthermore, OpEx remains affected by wage increase in July 2019. Cost-to-income ratio came in at 25.2% vs 29.9% a year ago.

Total credit risk charge including fair-value revaluation amounted to RUB43.1 bn in February. The charge was noticeably impacted by a weaker ruble, which was offset by the respective positive revaluation in trading income and had no impact on the bottom line. For the period 2M 2020, provisions totaled RUB69.4 bn vs RUB14.6 bn a year ago, which was mainly a result of the opposite directions in FX dynamics for comparable periods. Loan-loss provisions were 2.9 times the overdue loans as of March 1, 2020.

Net profit before income tax increased by 9.2% to RUB190.2 bn, while net profit was up by 8.9% to RUB156.5 bn.

Total assets increased by 1.2% in February to exceed RUB28.0 trn.

The Bank lent RUB1.2 trn to corporate clients in February, which was a record for the month. The loan portfolio was up by 0.2% adjusted for FX revaluation and exceeded RUB13.6 trn.

Loan issuance to retail clients in the amount of RUB285 bn was also a record for February, which was almost by a quarter higher than a year ago. Retail loan portfolio added 1.0% for the month and came in at RUB7.4 trn.

The share of overdues in the total loan portfolio increased marginally to 2.23%.

Changes in the securities portfolio in February were due to the redemptions of CBR bonds and purchase of corporate bonds. Meanwhile, the outstanding balance remained unchanged at RUB3.3 trn.

Client funding increased by 0.7% adjusted for FX revaluation in February: retail deposits and accounts were up by 0.9% and corporate accounts were up by 0.3%.

Core Tier 1 and Tier 1 capital remained merely unchanged. Earnings for the period of April 2019 – February 2020 has not been accounted for in capital calculation yet and would be reflected upon completion of the audit. Total capital increased in February by RUB60 bn mainly due to the net profit.

Risk-weighted assets (RWA) decreased by RUB0.3 trn in February. The decrease was mainly driven by the implementation of new IRB models for credit risk assessment of mortgages and introduction of regulatory specialized lending slotting criteria for project financing. At the same time, RWA expanded due to the loan portfolio growth in nominal terms.

 

Capital, RUB bn

1 Mar'20*

1 Feb’20

1 Mar'20*/

 1 Feb’20

 

 

1 Jan20  

1 Mar'20*/ 1 Jan20

Core Tier 1 capital N1.1

3 306

3 305

0.03%

 

3 298

0.24%

Tier 1 capital N1.2

3 306

3 305

0.03%

 

3 298

0.24%

Total capital N1.0

4 521

4 461

1.35%

 

4 561

(0.87%)

Capital adequacy ratios, %

 

 

 

 

 

 

Core Tier 1 capital N1.1, min 4.5%

10.49%

10.38%

0.11 pp

 

10.53%

(0.04 pp)

Tier 1 capital N1.2, min 6.0%

10.49%

10.38%

0.11 pp

 

10.53%

(0.04 pp)

Total capital N1.0, min 8.0%

14.31%

13.98%

0.33 pp

 

14.52%

(0.21 pp)

Risk-weighted assets, RUB bn

31 583

31 899

(0.99%)

 

31 404

0.57%

* preliminary calculations

 

Sberbank Financial Highlights for 2M 2020 (under RAS, non-consolidated)