Sberbank releases Financial Highlights for 2M 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 2017 data has been calculated in accordance with the updated methodology. Also note that the effect of subsequent events is excluded from the numbers as of January 1, 2018.
March 7, 2018
Key highlights for February 2018:
- In February, the Bank earned RUB63.8 bn in net profit;
- Net fee and commission income increased by 22.4% y/y for 2M 2018;
- The Bank issued RUB1.3 trln in loans in February, twice the amount issued a year ago;
- Retail deposits and account increased by RUB214 bn in February, thus offsetting over half of the January outflow.
Deputy Chairman of Sberbank Alexander Morozov stated:
“Twofold increase in loan issuance along with over 22% growth in net fees and commissions were supportive of robust performance. For the first two months of the year, Return on Equity exceeded 23% and Return on Assets reached 3.5%.”
Comments for 2M 2018:
Net interest income increased by 7.1% compared to 2M 2017 and totaled RUB195.1 bn. The increase was due to the expansion of working assets and declining interest rates on client funds.
Net fee and commission income was up by 22.4% to RUB55.8 bn, mainly driven by income from operations with bank cards and acquiring (+32.1%), settlement transactions (+21.0%) and fees from insurance products (+44.7%).
Operating expenses increased by 24.3% as compared to 2M 2017, due to continued dispersion of accrued expenses to smoothen seasonal fluctuations during the year. The dynamics is expected to normalize by the end of 1Q 2018. Cost-to-income ratio came at 29.1% for 2M 2018.
Provision charges amounted to RUB21.8 bn, or 13.1% lower than for 2M 2017. As of March 1, 2018, loan-loss provisions were 2.5 times the overdue loans.
Net profit before income tax came at RUB162.7 bn for 2M 2018, while net profit totaled RUB129.1 bn, including RUB63.8 bn for February.
Total assets increased by 0.6% in February to RUB23.1 trln. In real terms, assets were up by 0.9%.
The Bank lent over RUB1.1 trln to corporate clients in February, and about RUB2.0 trln year to date. This is twice the amount issued for 2M 2017. The corporate portfolio added 0.3% in real terms, but decreased by 0.05% in nominal terms due to revaluation of foreign currency denominated loans.
The Bank granted RUB205 bn in loans to retail clients in February, out of which more than a half were mortgages. Loans issued for 2M 2018 amounted to RUB400 bn, or 1.9-times the loans issued for 2M 2017. The retail loan portfolio amounted to RUB5.05 trln, up by 1.4% in February 2018.
The share of overdue loans in total loan portfolio stood at 2.5% in February, which is substantially below that of average for the banking sector (8.7% excl. Sberbank as of February 1, 2018).
Securities portfolio increased by 0.5% to RUB2.56 trln in February, as a result of purchases of CBR bonds.
Corporate deposits and accounts in February decreased in nominal rate by 2.5%, mainly due to current accounts. In real terms, the decline was 2.0%. Retail deposits and accounts increased in nominal terms by RUB214 bn, or 1.8%, in February, thus offsetting over half of the January outflow. Real growth in February was 2.0%. Overall, the client funds were up in February by RUB72 bn, or 0.4%, to RUB17.5 trln.
Core Tier 1 and Tier 1 capital (equal since Sberbank does not have instruments of additional capital) totaled RUB2,696 bn as of March 1, 2018, under preliminary calculations. Total capital amounted to RUB3,798 bn. Net profit was the primary source of capital growth in February.
Risk-weighted assets increased by RUB0.2 trln to RUB23.9 trln, due to retail loans and inter-bank loans.
Capital adequacy ratios as of March 1, 2018 under preliminary calculations were:
- N1.1 – 11.3% (minimum adequacy level, required by the Central Bank of Russia at 4.5%)
- N1.2 – 11.3% (minimum adequacy level, required by the Central Bank of Russia at 6.0%)
- N1.0 – 15.9% (minimum adequacy level, required by the Central Bank of Russia at 8.0%).