Sberbank releases 10M 2009 Financial Highlights (under RAS)
Please note that the numbers are calculated in accordance with Sberbank’s internal methodology approved in March 2009 as a part of internal accounting optimization and convergence with IFRS. Also note that the numbers as of 1 January 2009 include the effect of subsequent events.
November 24th, 2009
Income Statement Highlights for 10 months 2009 (as compared to 10 months 2008)
- Operating income before provisions grew by 27.3% y-o-y
- Net interest income increased by 38.4% y-o-y
- Net fee and commission income rose by 7.7% y-o-y
- Operating expenses decreased by 2.2% y-o-y
- Provision charge increased 4.2-fold y-o-y
- Profit before tax amounted to RUB22.1 bn vs. RUB143.7 bn for 10 months of 2008
- Net profit totaled RUB17.1 bn vs. RUB113.0 bn for 10 months of 2008
The Bank’s assets remained virtually unchanged ytd at RUB6,727 bn as of November 1st, 2009. A significant expansion of the corporate loan portfolio was offset by loan-loss provision reserve accumulation. Comparable data on the Russian banking sector for 9M 2009 suggest that Sberbank outpaced the sector in terms of corporate loan intake (7.5% vs. 1.6%), which took its share in aggregate corporate loans from 30.5% to 32.3%.
Sberbank extended lending to the ‘real economy’ – granting about RUB3.3 trln in loans to Russian companies over the past 10 months, including RUB340 bn in October. Corporate loan portfolio expanded by 9.2% ytd to RUB4,347 bn (starting from August 1st, 2009, Sberbank records assignment agreements with deferred payments (hereinafter referred to as “assignments’’) as a part of its corporate loan portfolio according to the Bank’s internal accounting methodology). Restructured loans, which are loan agreements with initial loan terms revised in borrower’s favor, comprised 12.4% of the Bank’s corporate loan book. To encourage lending activity the Bank has been lowering rates on loans in all currencies since 2Q 2009. Specifically, corporate lending rates in rubles were cut 0.75-2.00 pp in September. However, expansion of the corporate loan portfolio remains largely dependent on sluggish demand from Russian companies against the economic slowdown.
Given that consumer demand for loans remains subdued on the back of falling disposable income, the Bank’s retail loan portfolio shrank by 7.0% ytd to RUB1,170 bn. However, signs of stabilization have emerged in the second half of 2009. Some of the Bank’s regional branches saw increases in retail loan books in October, while the overall retail loan portfolio contracted by an immaterial 0.05% or RUB5 bn m-o-m.
Prudent credit risk management enables the Bank to sustain high quality of its loan portfolio. As of November 1st, 2009, overdue loans represented 4.0% of the Bank’s loan portfolio (both including and excluding assignments) and were more than two times covered by reserves.
The Bank’s securities portfolio grew 1.6 times ytd to RUB763 bn, mainly led by corporate bonds which increased 3.2 times ytd to RUB269 bn. The Bank opted to buy bonds of Russian blue-chip companies in different sectors as a sort of lending to the real economy. This led to shifts in the Bank’s securities’ portfolio with corporate bonds’ share rising from 17% at the beginning of the year to 35% and government and sub-federal bonds decreasing from 80% to 61% of total.
For 10M 2009, retail deposits increased by RUB334 bn to RUB3,459 bn, thus fully offsetting the outflow of corporate funds. Corporate accounts decreased by RUB145 bn ytd to RUB1,656 bn. The Bank sustains its conservative approach in terms of funding costs.
Retail deposit inflows support the Bank’s high liquidity in different currencies. For liquidity management purposes the Bank acquired government securities of Euro-zone countries. The Bank also repaid a total USD1.5 bn three-year syndicated loan in line with the schedule.
Sberbank’s regulatory capital (under CBR regulation No. 215-P) increased by 0.4% m-o-m in October to RUB1,340 bn due to earnings increase. The Bank’s regulatory capital expanded by 15.9% ytd. The capital adequacy ratio stood at 23% as of November 1st, 2009.
Sberbank’s Financial Highlights for 10M 2009 (in accordance with Russian accounting standards; non-consolidated)