Sberbank releases Financial Highlights for 11M 2016 (under RAS; non-consolidated)
Please note that the numbers are calculated in accordance with Sberbank`s internal methodology.
Key highlights for November, 2016:
- The Bank earned net profit of RUB53.4 bn
- Corporate loan portfolio increased by RUB254 bn in nominal terms (in real terms by RUB131 bn, or by 1.1%). Retail loans portfolio increased by RUB21 bn, or 0.5%
- Client funds increased by RUB303 bn in nominal terms (in real terms by RUB164 bn, or by 1.0%)
Deputy Chairman of Sberbank Alexander Morozov stated:
“A pickup in economic activity in November led to one of strongest growth in real terms in both loan portfolio and client funds this year – by RUB152 bn and RUB164 bn correspondingly. This combined with our improved efficiency, gives us confidence in achieving decent full-year results.
Comments for 11M 2016:
Net interest income increased by 44.9% to reach RUB1 trln: Interest income increased by 4.6%, mostly driven by the increase in volume of working assets; Interest expense came down by 21.7% due to improving liabilities structure with cheaper funding and decrease in market rates compared to 11M 2015.
Fee and commission income was up by 21.6% to RUB280.5 bn compared 11M 2015 mainly driven by transactional business with bank cards and acquiring. Income from bank insurance and settlements also contributed to Fee and commission income.
Operating expense increased by 12.6%, which was significantly slower than pre-provision operating income growth (32.7%). Operating expenses increase was moderate despite the continuing effect from wage indexation. The Bank continues to implement efficiency increase and operating cost-cutting program. Cost-to-Income ratio decreased from 38.7% for 11M 2015 to 32.8% for 11M 2016.
Total provision charges amounted to RUB22.6 bn in November. Total provision charge for 11M 2016 amounted to RUB271 bn, or 73% of 11M 2015 figure. Significant impact on the reserves during the year was due to the strengthening of the ruble against major foreign currencies. The Bank continues to form loan-loss provisions in-line with the requirements of the Central Bank of Russia. Provision coverage of overdue loans increased from 1.9 in the beginning of the year to 2.4 in November.
Net profit before income tax came at RUB615.1 bn. Net profit totaled RUB483.2 bn.
Total comprehensive income which includes the income from revaluation of financial assets available-for-sale and held-to-maturity, amounted to RUB527.0 bn.
Total assets in November increased by 0.9% to RUB21.7 trln. The decrease in assets by 5.8% since the beginning of the year is explained by the reduction of excessive liquidity by means of forgoing more expensive sources of clients’ funding. Additional factor during the year was negative revaluation of the foreign currency denominated assets on the back of Ruble appreciation.
The Bank lent RUB810 bn to corporate clients in November. Corporate loan issues from the beginning of the year were about RUB7.9 trln, which was 1.4X more than for 11M 2015. The loan portfolio ending balance increased by RUB254 bn in nominal terms (in real terms by RUB131 bn) from Ruble loans.
The Bank lent over RUB136 bn to retail clients in November; retail loan issues from the beginning of the year were RUB1.38 trln, which was 1.3X greater than for 11M 2015. Total retail loan portfolio increased by RUB21 bn in November (most of which were mortgage loans) to reach RUB4.3 trln as of December 1, 2016.
Thanks to a number of measures undertaken at the Bank the volume of overdue loans in November came down by RUB2.5 bn. The share of overdue loans of total loans was down to 2.8% in November, which is lower than the level in the beginning of the year (3.3%), and is substantially lower than the banking sector’s average (6.9% as of November 1, 2016).
Securities portfolio was down by RUB44 bn in November mainly due to redemptions of short-term European Commercial Papers nominated in U.S. Dollars. The portfolio ending balance was about RUB2.1 trln as of December 1, 2016.
Retail deposits and accounts in November increased by RUB123 bn in nominal terms (in real terms by RUB67 bn), mostly from Ruble term deposits. Retail deposits and accounts ending balance was RUB11.1 trln as of December 1, 2016.
Corporate deposits and accounts were up by RUB181 bn in nominal terms (in real terms by RUB97 bn) in November mainly from inflows to Ruble current accounts. Corporate deposits and accounts ending balance exceeded RUB5.6 trln as of December 1, 2016.
Core Tier 1 and Tier 1 capital (equal since Sberbank does not have instruments of additional capital) reached RUB2,206 bn as of December 1, 2016 under preliminary calculations. The monthly increase of RUB156 bn was mainly related to the increase of audited 3Q2016 net profit to Core Tier 1 and Tier 1 capital.
Total capital amounted to RUB3,039 bn as of December 1, 2016, up by RUB61 bn mainly due to earned net profit.
Risk-weighted assets increased by RUB410 bn in November mainly due to loans to banks and corporate loans to reach to RUB23.4 trln as of December 1, 2016.
Capital adequacy ratios as of December 1, 2016 under preliminary calculations were:
- N1.1 – 9.5% (minimum adequacy level, required by the Central Bank of Russia at 4.5%)
- N1.2 – 9.5% (minimum adequacy level, required by the Central Bank of Russia at 6.0%)
- N1.0 – 13.0% (minimum adequacy level, required by the Central Bank of Russia at 8.0%).