Sberbank releases Financial Highlights for 2008 (under RAS)

Jan 30, 2009

Please note that the numbers are calculated in accordance with the Bank’s internal methodology in effect from 1 January 2008 following the introduction of the new accounting rules (See the Bank of Russia’s Regulation No.302-P). Also note that the numbers as of 1 January 2008 include the effects of events after the end of the reported period whereas the numbers as of 1 January 2009 do not.

January 30, 2009

In 2008, a year of challenging economic environment both in Russia and globally Sberbank’s lending business showed a high rate of growth. As of 1 January 2009, the loan portfolio totaled RUB5,561 bn, increasing by 35.5% or RUB1,457 bn over the year and exceeding the increase for 2007 (RUB1,392 bn).

As a result of extensive lending to the national economy Sberbank added about USD900 bn to the corporate loan portfolio and more than RUB300 bn to the retail portfolio for the year.

In 2008, Sberbank provided about RUB5 trillion in loans to corporate clients (including RUB450 bn in December). Furthermore, Sberbank lent RUB70 bn to the Russian corporate sector by purchasing bonds of Russian issuers, over RUB3 bn in December. Companies, which received funding from the Bank, included small businesses, companies of defense and construction sectors, investment companies and other enterprises across almost all domestic industries.

In 2008 the Bank signed more than 3.5 mn loan agreements with individuals for the total amount of RUB800 bn (including RUB38 bn in December).

At the same time Sberbank adhered to its conservative risk management policy. As a result the overdues made 1.6% of the loan portfolio, whereas the coverage ratio stood at 2.5 as of January 1, 2009.

Investment in securities remained virtually unchanged throughout the year at RUB513 bn. More than 60% of the portfolio is comprised of government securities used for liquidity management purposes. Gains from investment in securities recognized though P&L amounted to RUB29.8 bn, including interest income of RUB32.2 bn, dividends of RUB0.1 bn, unrealized revaluation loss of RUB1.3 bn and realized loss of RUB1.2 bn.

The Bank’s funding base increased due to deposit inflows on both corporate and retail accounts. Subordinated loans received from the CBR made another large source of funding.

For 2008 the total retail and corporate deposits grew by 22.3% to RUB4,875 bn:

  • Deposits from individuals increased by 16.3% or RUB433 bn to RUB3,089 bn in 2008. Over the November—December period retail deposit inflow of RUB181 bn was nearly twice the size of the outflow in October. For the first 11 months of 2008 Sberbank’s share of retail deposits rose to 52.5%.
  • Corporate deposits grew by 34.4% or RUB457 bn to RUB1,785 bn in 2008. The December inflow of RUB32 bn was consistent with the average monthly growth rate throughout 2008.

As of 1 January 2009, the subordinated loans provided to Sberbank by the Bank of Russia totaled RUB500 bn.

Sberbank’s regulatory capital reached RUB1,157 bn, up by RUB475 bn year-to-date partially through retained profit the Bank of Russia’s subordinated loans which can be included in the regulatory capital under the Bank of Russia’s regulation.

Sberbank proceeds with cost cutting and optimization of cost structure. Cost/income ratio enhanced by 3 pp y-o-y to 43.1%.

Profit before tax (excluding the effects of events after the reporting date) for the year 2008 amounted to RUB143.5 bn. Net profit (excluding the effects of events after the reporting date) totaled RUB108.2 bn, with the bulk of it generated by lending activities.

Net profit including the effects of the events after the reporting date is estimated at about RUB113 bn. Sberbank will publish its financials with the effects of the events after the reporting date in accordance with the Investor calendar.

For the first 11 months of the year 2008 the Sberbank profit before tax accounted for 46% of the aggregate profit of the Russian banking system.

Results of Sberbank’s operations as of January 1, 2009 (in accordance with Russian accounting standards; non-consolidated; not including the effects of the events after the reporting date).