Sberbank releases Financial Highlights for 6M 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 RUB69.0 bn in net profit in June;
- Corporate and retail client funds increased by RUB513 bn in June or 2.8% m/m;
- Loan portfolio added RUB196 bn in June or +1.1% m/m;
- Net fee and commission income grew 22.8% as compared to 6M 2017.
Deputy Chairman of Sberbank Alexander Morozov stated:
“Growth in retail lending proved sustainable year to date which raised the share of retail loans in total portfolio by 2 p.p. to 30%. Income from operations with bank cards, which remain one of the major drivers of the fees and commissions business, increased by 32% for 6 months. These factors together are largely supportive for ROE above 20%.”
Comments for 6M 2018:
Net interest income increased by 7.0% compared to 6M 2017 and totaled RUB620.1 bn. Growth drivers remain the same: working assets expansion and lower cost of client funds.
Net fee and commission income grew by 22.8% to RUB200.0 bn. Growth rates so far this year have been double those seen last year. The largest contributors to fee income growth are operations with bank cards and acquiring (+32.4%), settlement transactions (+21.1%) and fees from insurance products (+52.5%).
Operating expenses increased by 7.4%, which was slower than growth in operating income before provisions (+10.5%). The transition to a more even allocation of accrued expenses throughout the year is under way. Cost-to-income ratio for 6M 2018 decreased by 0.8 p.p. year on year to 28.5%.
Provision charges for 6M 2018 amounted to RUB131.6 bn, which was 13.9% lower as compared to the same period a year ago. As of July 1, 2018, loan-loss provisions were 2.6 times the overdue loans.
Net profit before income tax came at RUB504.8 bn for 6M 2018, while net profit totaled RUB397.8 bn, including RUB69.0 bn earned in June.
Total assets increased by 1.9% in June to RUB24.7 trln, mainly driven by both corporate and retail loan portfolio growth as well as increased balances on nostro accounts as part of current liquidity management.
The Bank lent RUB1.1 trln to corporate clients in June, and RUB6.7 trln year to date. This is 1.5-times the amount for 6M 2017. Loan issuances year-to-date have been steadily exceeding repayments, thus leading to portfolio expansion. Portfolio of corporate loans increased by 0.6% in June to over RUB12.8 trln as of July 1, 2018.
The Bank has been granting about RUB200-280 bn in loans to retail clients every month thus far this year. Loans issued in June amounted to RUB275 bn. For 6M 2018 total loans issues amounted to about RUB1.5 trln, or 1.7-times the amount issued for 6M 2017. Retail loan portfolio was up by 2.2% in June and 11.5% year to date, amounting to RUB5.5 trln as of July 1, 2018.
The share of overdue loans in total loan portfolio remained at 2.3%, which is substantially below that of average for the banking sector (8.6% excl. Sberbank as of June 1, 2018).
Securities portfolio increased by 1.4% to RUB2.7 trln in June, mainly as a result of OFZ purchases.
Corporate deposits and accounts in June increased by 6.1% to RUB6.4 trln, with the increase equally split between deposits and current accounts. Corporate deposits and accounts grew 12.5% year to date.
Retail deposits and accounts in June added 1.2% to RUB12.4 trln. The increase was contributed both by term and current accounts. Retail deposit and accounts increased by 2.0% year to date.
The Bank issued RUB50 bn exchange-traded bonds with maturity of 3 year and 7 months and a coupon rate of 7.60%. Demand for the issue came from a wide range of investors and clients. Thus far Sberbank has issued RUB209 bn in exchange-traded bonds with maturities from 3 to 5 years.
Core Tier 1 and Tier 1 capital (equal since Sberbank does not have instruments of additional capital) totaled RUB2,781 bn as of July 1, 2018, under preliminary calculations. Total capital amounted to RUB3,772 bn. The decrease in capital was due to AGM approval of dividend payout for 2017 in the amount of RUB271 bn.
Risk-weighted assets increased by RUB0.4 trln to RUB25.9 trln, mainly due to increased lending volumes and annual recalculation of operational risk.
Capital adequacy ratios as of July 1, 2018 under preliminary calculations were:
- N1.1 – 10.8% (minimum adequacy level, required by the Central Bank of Russia at 4.5%)
- N1.2 – 10.8% (minimum adequacy level, required by the Central Bank of Russia at 6.0%)
- N1.0 – 14.6% (minimum adequacy level, required by the Central Bank of Russia at 8.0%).