Sberbank releases Financial Highlights for January-February 2010 (under RAS; non-consolidated)

Mar 16, 2010

Please note that the numbers are calculated in accordance with Sberbank’s internal methodology pursuing internal accounting optimization and convergence with IFRS. The numbers as of 1 January 2010 exclude the effect of events occurring after the balance sheet date.
16 March 2010

Income Statement Highlights for January-February 2010 (as compared to January-February 2009)

  • Operating income before provisions fell by 15.1% y-o-y
  • Net interest income increased by 8.9% y-o-y
  • Net fee and commission income rose by 11.1% y-o-y
  • Provision charge amounted to RUB33.6 bn vs. RUB68.6 bn for January-February 2009
  • Operating income after provisions increased by 63.3% y-o-y
  • Operating expenses increased by 7.8% y-o-y
  • Profit before tax increased 3.5-fold to RUB25.3 bn vs. RUB7.3 bn for January-February 2009
  • Net profit grew 4.8-fold to RUB24.4 bn vs. RUB5.1 bn for January-February 2009 

Operating income before provisions fell by 15.1% or RUB15.1 bn y-o-y due to reduced conversion gains on the back of changes in the Bank’s FX swap exposure and FX rates changes.

Other revenue lines increased in January-February 2010, with net interest income up 8.9% y-o-y and net fee and commission income increasing 11.1% y-o-y. Operating expenses grew slower than income, at 7.8% y-o-y.

The Bank kept on creating provisions adequate to its credit risks, allocating RUB33.6 bn in provisions for 2m 2010, including RUB13.6 bn in February.

Revenues from the core banking activity for 2m 2010 were sufficient both to form provisions and to increase earnings. Net profit grew 4.8-fold y-o-y to RUB24.4 bn in January-February 2010.

For 2m 2010, assets increased by 1.7% ytd to RUB7,229 bn led by expanding securities portfolio.

The Bank’s securities portfolio grew 27.7% or RUB292 bn mainly due to investments in state bonds, OBR and OFZ, which amounted to RUB254 bn as well as purchases of sub-federal and corporate bonds. This led to respective changes in the portfolio structure with the share of state and sub-federal bonds increasing from 70% to 76% and the share of corporate bonds down from 28% to 23%. Expansion of the securities’ portfolio helped the Bank to diversify its asset base and revenue streams.

Sberbank extended lending to the ‘real economy’– providing about RUB450 bn in loans to Russian companies during the first 2m 2010, with about RUB330 bn loans granted in the regions. However, premature loan repayments offset new loan issues leading to a 0.5% contraction of the corporate loan book to RUB4,229 bn in January-February 2010.

Retail loan portfolio shrank by 1.9% in January-February to RUB1,147 bn, with the m-o-m portfolio contraction slowing to -0.4% in February from -1.5% in January. Lack of reliable consumer demand restrains loan volume growth.

As of 1 March 2010, overdue loans represented 4.7% of the Bank’s loan portfolio. The Bank continues to adhere to conservative credit risk management. Loan-loss provisions increased from RUB589 bn to RUB628 bn for January-February. Overdues’ coverage held stable at 2.5.

Asset expansion was primarily financed by customer deposits and accounts. Following a seasonal outflow in January, retail deposits added 2.4% or RUB88.1 bn in February, amounting to RUB3.824 bn for 2m 2010, up 1.2% ytd.

Corporate accounts and deposits rose in February offsetting the January outflow, which lead to a 0.6% ytd increase to RUB1,735 bn.

Sberbank’s regulatory capital (under CBR regulation No. 215-P) remained virtually unchanged (+0.05% m-o-m) at RUB RUB 1,324 bn, as of 1 March 2010. Despite the inclusion of January-February net profit into the Bank’s supplementary capital, the excess of supplementary over the core capital implied no change to the total regulatory capital.

Sberbank’s capital adequacy ratio stood around 21% as of 1 march 2010, according to preliminary estimates.

Sberbank’s Financial Highlights for January-February 2010 (in accordance with RAS; non-consolidated)