Sberbank releases Financial Highlights for 8M 2016 (under RAS; non-consolidated)

Sep 07, 2016

Please note that the numbers are calculated in accordance with Sberbank`s internal methodology.

Key highlights for August, 2016:

  • The Bank earned net profit of RUB47.8 bn in August
  • Retail loan portfolio increased by RUB150 bn in August – highest monthly volume since January 2015
  • Retail deposits excluding FX revaluation effect continued to show positive dynamics increasing by 0.4%

Deputy Chairman of Sberbank Alexander Morozov stated:

“Sound financial results and audit of the 2Q2016 net profit contributed to the increase of Core Tier 1 and Tier 1 capital adequacy ratios to a new level of 8.7%. Another highlight of August was a record monthly volume of new issues of retail loans since the beginning of 2015.”

Comments for 8M 2016:

Net interest income came at RUB734.9 bn, up by 51.6% compared to 8M 2015: Interest income increased by 6.3%, mostly driven by the increase in volumes of working assets; Interest expenses came down by 21.3% due to the substitution of state funding with clients` funds and the decrease in market rates compared to last year.

Fee and commission income was up by 22.8% to RUB198.4 bn, driven by transactional business with bank cards, acquiring and bank insurance.

Operating expenses increased by 11.2%, which was significantly slower than pre-provision operating income growth (34.5%). The increase in operating expenses was driven by continuing indexation of wages. Cost-to-Income ratio decreased from 39.5% for 8M 2015 to 32.6% for 8M 2016.

Total provision charges decreased by RUB64.1 bn compared to 8M 2015 and amounted to RUB213.7 bn. The Bank continues to form loan-loss provisions in-line with the requirements of the Central Bank of Russia. Loan-loss provisions remained 2 times the overdue loans.

Net profit before income tax came at RUB415.4 bn vs. RUB142.7 bn for 8M 2015. Net profit totaled RUB322.8 bn, which was 3 times higher than the result for 8M 2015.

Total comprehensive income which includes the income from revaluation of financial assets available-for-sale and held-to-maturity, amounted to RUB388.2 bn.

Assets in August decreased by 1.1% to RUB21.9 trln mainly due to revaluation of the foreign currency denominated assets on the back of ruble appreciation.

The Bank lent over RUB620 bn to corporate clients in August. Corporate loan issues from the beginning of the year were about RUB5.4 trln, which was 1.5X more than for 8M 2015. The loan portfolio ending balance decreased by RUB284 bn, or by 2.4% to RUB11.7 trln as of September 1, 2016. The decrease was influenced by large volumes of redemptions as well as by revaluation of earlier issued foreign currency denominated loans.

The Bank lent RUB150 bn to retail clients in August. Retail loan issues from the beginning of the year were RUB980 bn, which was by a third greater than for 8M 2015. Total retail loan portfolio increased by RUB37 bn in August to reach RUB4.26 trln as of September 1, 2016. The share of mortgages in retail portfolio was 56%.

Retail overdue loans of total loans remained at 4.2%. Corporate overdue loans of total loans were 3.2%. Overall the share of overdue loans of total clients loans was 3.5%, which is substantially lower than the banking sector’s average (7.0% as of August 1, 2016).

Securities portfolio was down by RUB73 bn in August due to redemptions of OFZ bonds, sale of Eurobonds of the Russian Federation, as well revaluation of FX denominated part of the portfolio. The portfolio ending balance was RUB2.38 trln as of September 1, 2016.

Retail deposits and accounts in August decreased by RUB25 bn in nominal terms, whereas in real terms demonstrated an inflow of funds both in rubles and in foreign currencies. Corporate deposits and accountswere down by RUB180 bn due to both FX current accounts as well as FX revaluation. Total deposits and accounts decreased by RUB206 bn, or by 1.2%, to RUB16.9 trln as of September 1, 2016.

The share of funds borrowed from the Central Bank (excluding the subordinated loan) in total liabilities remained immaterial at 0.4%.

Core Tier 1 and Tier 1 capital (equal since Sberbank does not have instruments of additional capital) reached RUB2,045 bn as of September 1, 2016 under preliminary calculations. The increase in Core Tier 1 and Tier 1 capital was due to audited 2Q2016 net profit.

Total capital amounted to RUB2,884 bn as of September 1, 2016, up by RUB70 bn due to monthly net profit and revaluation of securities portfolio.

Risk-weighted assets decreased by RUB344 bn in August mainly due to the decrease of corporate loan portfolio.

Capital adequacy ratios as of September 1, 2016 under preliminary calculations were:

  • N1.1 – 8.7% (minimum adequacy level, required by the Central Bank of Russia at 4.5%)
  • N1.2 – 8.7% (minimum adequacy level, required by the Central Bank of Russia at 6.0%)
  • N1.0 – 12.2% (minimum adequacy level, required by the Central Bank of Russia at 8.0%).

Sberbank 8M 2016 Financial Highlights (under RAS, non-consolidated)