Sberbank releases Financial Highlights for 3 months of 2020 (under RAS; non-consolidated)

Apr 07, 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.

April 7, 2020

Key highlights for March 2020:

  • The Bank earned RUB62.1 bn;
  • Total loan issuance hit a record for March, including RUB315 bn to retail clients and RUB1.15 trn to corporate clients.
  • Corporate loan portfolio expanded by 5.4% or by 0.4% adjusted for FX-revaluation, the retail loan portfolio increased by 1.1%.
  • Client deposits and accounts increased by 0.6% adjusted for FX-revaluation, with growth both on the corporate and retail sides.

Deputy Chairman of Sberbank Alexander Morozov stated:

“In March Sberbank started rebuilding its operations to cope with new challenges. We saw a spike in activity in the first half of the month in the majority of business segments: corporate and retail loan issuance totaled RUB1.5 trn, acquiring turnover increased noticeably, volumes of FX conversion transactions were elevated. The number of daily digital users in Sberbank Online increased by 1 million. Additionally, provisions allocated in March accounted for an anticipated slowdown in the Russian economy. Sberbank earned RUB218.7 bn of net profit and delivered 19.4% return on equity in the first three months of 2020.”

Comments for 1Q 2020:

Net interest income increased by 11.0% as compared to 1Q 2019 and amounted to RUB331.7 bn. The increase was driven by retail loan portfolio expansion and a gradual decline in cost of funding.

Net fee and commission income was up by 20.3% to RUB119.0 bn. The largest contributors to fee income growth remain operations with bank cards and settlement transactions for corporate clients. Fee and commission income was also supported by a short-term increase in bank cards trading turnover in the middle of the reporting month.

Operating expenses increased by 3.7% showing a deceleration in March compared to the previous period due to the introduction of a holiday regime and a slowdown in business activity at the end of the month. Cost-to-income ratio in 1Q2020 came in at 23.1% vs 31.5% a year ago.

Total credit risk charge including fair-value revaluation amounted to RUB109.4 bn in March. The charge was noticeably impacted by the sharp depreciation of the ruble against major currencies (16% against the US dollar and euro for the month), which led to the additional FX-loans provisions over RUB60 bn without deterioration in asset quality. It was offset by a respective positive revaluation in trading income and had no impact on the bottom line. For 1Q2020 provisions totaled RUB178.8 bn vs RUB21.5 bn a year ago. Loan-loss provisions were 2.9 times the overdue loans as of April 1, 2020.

Net profit before income tax increased by 3.4% to RUB270.0 bn. Net profit was up by 0.2% to RUB218.7 bn.

Total assets increased by 5.8% to RUB29.7 trn with over half of the increase driven by positive FXrevaluation. Monthly growth adjusted for FX-revaluation was 2.2%.

The Bank lent RUB1.15 trn to corporate clients in March, which was a record for the month For 1Q2020 the Bank originated RUB3.2 trn in loans which is 31% higher y/y. Corporate loan portfolio grew for the month by 0.4% adjusted for FX-revaluation or about RUB14.4 trn driven by RUB lending.  

Loan issuance to retail clients in the amount of RUB315 bn was also a record for March. Year to date the Bank lent over RUB850 bn, which is 20% higher than a year ago. Retail loan portfolio added 1.1% for the month and came in at RUB7.5 trn.

The share of overdues in the total loan portfolio changed insignificantly to 2.24%.

The outstanding securities portfolio balance increased for the month by 7.4% to RUB3.5 trn mainly due to the acquisition of federal loan bonds, Russian Eurobonds and corporate bonds. The portfolio growth was also affected by revaluation of FX-bonds.

Client funding showed a positive dynamics in March, due to an earlier payroll payment following the announcement of a non-working week from March 29 to April 5. Thus, the growth in client funds amounted to 4.7%: corporate deposits and accounts increased by 7.9%, retail - by 3.1%, and excluding FX revaluation by 0.7% and 0.5%, respectively.

Core Tier 1 and Tier 1 capital increased by 21% or RUB686 bn due to the reflection of the net profit for 2-4 quarters of 2019 upon completion of the audit.

Total capital in March increased by RUB7 bn mainly due to the net profit. The negative revaluation of securities in the amount of RUB45 bn negatively impacted the dynamics of total capital, as well as the decrease in profit recorded in equity due to adjustments provided by the Bank of Russia Regulation No. 646-P “On the methodology for determining shareholder equity (capital) of credit institutions (Basel III)”.

The risk-weighted assets were up by RUB 0.6 trn in March due to the loan portfolio growth, primarily driven by FX revaluation, as well

as the annual recalculation of operational risk according to the data for 2019. At the same time, a significant decrease in risk-weighted assets occurred as a result of the introduction of the specialized lending slotting criteria for project financing.

Capital, RUB bn

 

1 Apr'20*

1 Mar’20

1 Apr'20*/

 1 Mar’20

 

 

1 Jan’20  

1 Apr'20*/ 1 Jan’20

Core Tier 1 capital N1.1

 

3 991

3 305

20.8%

 

3 300

20.9%

Tier 1 capital N1.2

 

3 991

3 305

20.8%

 

3 300

20.9%

Total capital N1.0

 

4 528

4 521

0.2%

 

4 568

-0.9%

Capital adequacy ratios, %

 

 

 

 

 

 

 

Core Tier 1 capital N1.1, min 4.5%

 

12.36%

10.41%

1.95 pp

 

10.51%

1.85 pp

Tier 1 capital N1.2, min 6.0%

 

12.36%

10.41%

1.95 pp

 

10.51%

1.85 pp

Total capital N1.0, min 8.0%

 

13.99%

14.21%

-0.22 pp

 

14.52%

-0.53 pp

Risk-weighted assets, RUB bn

 

32 369

31 807

1.8%

 

31 470

2.9%

* preliminary calculations

 

Sberbank Financial Highlights for 1Q 2020 (under RAS, non-consolidated)