11 Nov 2014 07:32
Sberbank / Miscellaneous 11.11.2014 08:32 Dissemination of a Regulatory Announcement, transmitted byEquityStory.RS, LLC - a company of EQS Group AG.The issuer is solely responsible for the content of this announcement.--------------------------------------------------------------------------- Sberbank releases Financial Highlights for 10M 2014 (under RAS;non-consolidated) Please note that the numbers are calculated in accordance with Sberbank'sinternal methodology. November 11, 2014 Income Statement Highlights for 10M 2014 (as compared to 10M 2013): - Net interest income increased by 21.6% y-o-y - Net fee and commission income grew by 22.2% y-o-y - Noncredit commission income grew by 24.3% y-o-y - Operating income before total provisions increased by 28.6% y-o-y - Total provision charge was RUB311.5 bn vs. RUB99.5 bn charge for 10M 2013 - Operating expenses were up by 12.3% y-o-y - A sizable provision charge was the main reason to a negative dynamic in net profit. Net profit before income tax amounted to RUB370.3 bn, down by 5.4% vs. 10M 2013. Net profit totaled RUB293.9 bn, down 7.8% from that of January-October 2013. Please also note that comparison to Net profit for the same period of 2013 is skewed due to adjustments that reflect new CBR regulation on deferred tax assets and liabilities that came into force since May 2014. Excluding the effect of the one-off change in accounting, net profit would have amounted to RUB303.0 bn. Net interest income came at RUB711.6 bn, up by 21.6% compared to that ofJanuary-October 2013: - Interest income increased by RUB245.7 bn driven by both corporate and retail loan portfolio growth; - Interest expenses increased by RUB119.4 bn due to deposits growth (both customer and corporate) and increase in CBR funding volumes and costs; Net fee and commission income amounted to RUB219.2 bn; up by 22.2% y-o-ycompared to that of January-October 2013, contributed primarily bynoncredit commission income that was up by 24.3%, mostly driven by bankcards transactions and acquiring, which accounted for over 60% of thegrowth. Insurance, pension and investment products, guarantees issuance andtrade finance also demonstrated strong growth. Net income from trading operations amounted to RUB73.1 bn, includingRUB40.6 bn in October, primarily from conversion operations. In addition toa rather elevated demand for foreign currency from corporate and retailclients in October, the growth in net income from trading operations wasdriven by the following factors: - In accordance with local regulatory accounting principles, provision expenses related to revaluation of FX loans on ruble devaluation are reported as conversion income (with a positive sign). In October conversion income was RUB11.6 bn; - Positive revaluation of investments in foreign subsidiaries in the amount of RUB27.3 bn in October (RUB48.5 bn for 10M2014). Please note that as per new regulatory change in accounting for investments in foreign subsidiaries effective November 1, 2014, the full amount of revaluation accumulated in 2014 would no longer be reflected in the Profit & Loss Statement. Operating income before provisions increased by 28.6% to exceed RUB1 trn. Operating expenses increased by 12.3%. C/I ratio for January-October 2014decreased by 4.9 pp to 33.7%. The Bank continues to optimize its expensesto maintain the trend when pre-provision operating income growth (28.6% for10M2014) significantly outpaces operating expenses increase (12.3% for10M2014). Total provision charges amounted to RUB311.5 bn vs. RUB99.5 bn charge ayear earlier. The Bank formed a significant amount of provisions in Octoberurged by the following three factors: - The Bank increased provisions to nearly 100% of its total exposure to a single large corporate loan and was forced to take the case to court as the client failed to fulfil its current debt obligations; - Ruble devaluation relative to key foreign currencies, which required to form additional reserves in the amount of RUB11.6 bn for FX loans, even when the latter demonstrated no quality deterioration; - Worsening of the macroeconomic situation in the Ukraine advance quality deterioration of the Ukrainian corporate loan book. Overall the Bank continues to practice a conservative approach in loan-lossprovisioning based on requirements of the Central Bank of Russia. Coverageratio remained strong: loan-loss provisions are 2.3 times the overdueloans. As a result of sizable provision charges in October net profit beforeincome tax for 10M2014 amounted to RUB370.3 bn, down by 5.4% from that forJanuary-October 2013. Net profit totaled RUB293.9 bn, down 7.8% from thatof January-October 2013. Please also note that comparison to Net profit forthe same period of 2013 is skewed due to adjustments that reflect new CBRregulation on deferred tax assets and liabilities that came into forcesince May 2014 (please see Sberbank RAS Financial Highlights for 5M2014).Excluding the effect of the one-off change in accounting, net profit wouldhave amounted to RUB303.0 bn. In October assets increased by 2.9%, or RUB525 bn. The growth of theBalance Sheet was further influenced by positive revaluation of FXcomponent on ruble devaluation. Assets growth for 10M 2014 reached RUB2.4trln, or up by 14.5%, mainly due to total loan portfolio growth. The Bank lent about RUB590 bn to corporate clients in October. Totalcorporate loan issues for 10M 2014 reached RUB5.9 trln, or by 12% more thanfor the same period last year. Total corporate loan portfolio increased byRUB338 bn in October driven by both new loan demand as well as positiverevaluation of previously issued FX loans. Total corporate loan portfoliofor 10M 2014 increased by RUB1.6 trln, or 18.4%, to reach about RUB10.2trln. The Bank lent about RUB160 bn to retail clients in October. Total retailloan issues for 10M 2014 reached nearly RUB1.7 trln, which exceeded theamount of issues for the same period last year (excluding the credit cardsturnover) by 17%. Total retail loan portfolio increased by RUB57 bn inOctober to reach about RUB4.0 trln. The increase of the retail loanportfolio for 10M 2014 amounted to RUB643 bn, or up 19.3%. Overdue loans came at 2.4% of total loans (as of November 1, 2014), up by10bp for the month. Securities portfolio increased by RUB42 bn, or 2.3% in October mainly fromrevaluation effect from Eurobonds of the Russian Federation and corporateEurobonds. Corporate funding increased by RUB178 bn in October due to term deposits.Corporate deposits and accounts portfolio increased by RUB630 bn, or 20.2%,for 10M 2014. Retail deposits and accounts increased by RUB124 bn inOctober, or by RUB140 bn for 10M2014 (up 1.7% YTD for 10M2014). The fundingbase was substantially influenced by FX revaluation. Core Tier 1 and Tier 1 capital (equal since Sberbank does not haveinstruments of additional capital) reached RUB1,605 bn as of November 1,2014 under preliminary calculations. Total capital amounted to RUB2,251 bnon the same date. Key constituents to affect total capital in October werenet profit contribution (+RUB7 bn), FX revaluation of investments insubsidiaries and issued subordinated debt (-RUB30 bn), and Sberbank'sraised subordinated debt revaluation (+RUB8 bn). Furthermore, the change inthe CBR regulation 395-P (effective October 1, 2014) in regards toaccounting for derivatives now states that the full amount (both realizedand unrealized) of revaluation of derivatives is included in total capital;hence, added RUB12 bn to Sberbank's total capital in October. As a result, total capital decreased by RUB8 bn in October. Total capital adequacy level was also affected by growth in risk-weightedassets, related to revaluation of FX component. Capital adequacy ratios under preliminary calculations as of November 1,2014 were: - N1.1 - 8.6% (minimum adequacy level, required by the Central Bank of Russia at 5.0%) - N1.2 - 8.6% (minimum adequacy level, required by the Central Bank of Russia at 5.5%) - N1.0 - 12.0% (minimum adequacy level, required by the Central Bank of Russia at 10.0%, considering Deposit Insurance Regulation). Sberbank 10M 2014 Financial Highlights (under RAS, unconsolidated) Contact: 11.11.2014 The EquityStory.RS, LLC Distribution Services include RegulatoryAnnouncements, Financial/Corporate News and Press Releases.Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: EnglishCompany: Sberbank 19 Vavilova St. 117997 Moscow RussiaPhone: +7-495-957-57-21Fax: E-mail: media@sberbank.ruInternet: www.sberbank.ruISIN: US80585Y3080, RU0009029540, RU0009029557, US80585Y4070Listed: Frankfurt in Open Market (Entry Standard) ; MICEX, RTSCategory Code: MSCTIDM: SBERSequence Number: 2384Time of Receipt: Nov 11, 2014 08:31:57 End of Announcement EquityStory.RS, LLC News-Service ---------------------------------------------------------------------------UK-Regulatory-announcement transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.