Sberbank releases Financial Highlights for 9M 2018 (under RAS; non-consolidated)

Oct 05, 2018

Please note that the numbers are calculated in accordance with Sberbank`s internal methodology, the numbers for 2018 and 2017 are comparable. 

Key highlights for September 2018:

  • The Bank earned RUB72.1 bn in net profit in September;
  • The client loan growth came at 0.8% in real terms in September;
  • The amount of loans issued to clients in September totaled RUB1.1 trln. The amount of loans issued since the beginning of the year exceeded the amount disbursed for the same period last year by 65% to retail clients and by 23% to corporate clients;
  • The Bank decreased its overdue loan portfolio by RUB16.8 bn. Loan-loss provisions came at 2.6 times the overdue loans;
  • Net fee and commission income grew 22% as compared to 9M 2017.

Deputy Chairman of Sberbank Alexander Morozov stated:

Fee and commission income is playing an increasing role in total operating income of the Bank, delivering growth of over 20% y/y. The cumulative net fee and commission income result for 9 months now covers 80% of total operating expenses, which helps in mitigating interest rate volatility on the market. Such dynamics became viable thanks to the implementation of the Bank’s Strategy aimed at developing an ecosystem and increasing risk-free commission income.” 

 

Comments for 9M 2018:

Net interest income increased by 5.2% compared to 9M 2017 and totaled RUB939.0 bn mostly driven by increasing amount of working assets.

Net fee and commission income grew by 22.1% to RUB311.7 bn. The largest contributors to fee income growth were operations with bank cards and acquiring, settlement transactions and fees from insurance products. In September, the Bank reflected one-off expenses on loyalty programs, which slowed down the growth of net fee and commission income. Starting from 2019 the Bank plans to switch to the accrual method for loyalty program expenses to eliminate volatility.

Operating expenses increased by 5.1% y/y, which was slower than growth in operating income before provisions (10.5% y/y); the dynamics in operating expenses in part were supported by a more even accrual of expenses throughout the year. In light of the goal to improve efficiency of IT projects in the Agile-format, the Bank launched an internal reorganization to move employees from its subsidiary Sberbank Technologies JSC to Sberbank PJSC. This process would be finalized by the end of the year without causing any changes to the headcount of Sberbank Group.

Cost-to-income ratio for 9M 2018 improved to 28.5% as compared to 30.0% for the same period a year ago.

Provision charges for 9M 2018 amounted to RUB218.7 bn, which was 11.8% lower as compared to the same period a year ago. The charge in September came at RUB5.1 bn and was significantly influenced by the recovery of provisions against FX loans as a result of ruble appreciation. As of October 1, 2018, loan-loss provisions were 2.6 times the overdue loans.

Net profit before income tax came at RUB753.0 bn for 9M 2018, while net profit totaled RUB612.7 bn, including RUB72.1 bn earned in September.

Total assets increased by 0.5% in September to RUB25.4 trln. Real growth came at 1.5% on the back of clients loan portfolio expansion.

The Bank lent RUB0.8 trln to corporate clients in September, and RUB9.5 trln year to date, which was more than the amount lent in the same period a year ago by 23%. Corporate loan portfolio added 0.3% in September in real terms.

The Bank granted RUB274 bn in retail loans in September. As a result, the amount of loans issued year to date totaled RUB2.3 trln in September, exceeding the amount for 9M 2017 by 65%. Retail loan portfolio expanded by 2.0% in September and by 19.0% year to date. Sberbank market share in retail lending increased by 1.0 pp to 41.5% during 8M 2018.

The Bank decreased its overdue loan portfolio by RUB16.8 bn, and the share of overdue loans in total loan portfolio decreased from 2.45% to 2.36%, which is substantially below the banking sector’s average (8.3% excl. Sberbank as of September 1, 2018).

Securities portfolio decreased by 1.1% due to redemptions of CBR bonds.

Client deposits and accounts increased by 0.6% in real terms in September, or by 3.0% year to date.

Core Tier 1 and Tier 1 capital (equal since Sberbank does not have instruments of additional capital) were merely unchanged in September and totaled RUB3,189 bn, under preliminary calculations. Total capital increased to RUB4,060 bn on the back of earned net profit and change in methodology as per the new regulation #646-P of the Central Bank of Russia.

 

 

Capital, RUB bn

under preliminary calculations
1
Oct'18

1 Sep'18

1 Jan'18

1 Oct'18 /
1
Sep'18

1 Oct'18 /
1
Jan'18

Core capital N1.1

3 189

3 189

2 638

-

20.9%

Tier 1 capital N1.2

3 189

3 189

2 638

-

20.9%

Total capital N1.0

4 060

3 917

3 668

3.7%

10.7%

Capital adequacy ratios, %

 

 

 

 

 

Core capital N1.1, min. 4,5%

11.9%

11.9%

10.7%

-

1.2 pp

Tier 1 capital N1.2, min. 6,0%

11.9%

11.9%

10.7%

-

1.2 pp

Total capital N1.0, min. 8,0%

15.2%

14.6%

14.9%

0.6 pp

0.3 pp

Risk-weighted assets, RUB bn

26 758

26 742

24 689

0.1%

8.4%

 

Sberbank 9M 2018 Financial Highlights (under RAS, non-consolidated)