SBER.L Regulatory News (SBER)

Sberbank releases Financial Highlights for 10M 2018 (under RAS; non-consolidated)

Please note that the numbers are calculated in accordance with Sberbank's internal methodology, the numbers for 2018 and 2017 are comparable.November 08, 2018

Key highlights for October 2018:

Deputy Chairman of Sberbank Alexander Morozov stated:

 "We keep on developing in line with our plans for the year. Operating income growth over 10% y/y is supported by lending and transactional business. Our retail loan book expanded to RUB6 trln, adding more than RUB1 trln year to date."

Comments for 10M 2018:

Net interest income increased by 4.6% compared to 10M 2017 and totaled RUB1,044 bn mostly driven by increasing amount of working assets.

Net fee and commission income grew by 21.0% to RUB348 bn. The largest contributors to fee income growth were operations with bank cards and acquiring, settlement transactions and fees from insurance products.

Operating expenses increased by 6.1% y/y, which was slower than growth in operating income before provisions (10.3% y/y). The transition to a more even allocation of accrued expenses throughout the year is under way. Furthermore, the Bank continues the internal reorganization launched in summer to move its subsidiary Sberbank Technologies JSC to Sberbank PJSC without causing any changes to the headcount of Sberbank Group.

Cost-to-income ratio for 10M 2018 improved to 28.9% as compared to 30.1% for the same period a year ago.

Provision charges for 10M 2018 amounted to RUB229 bn, which was 12.3% lower as compared to the same period a year ago. The charge in October came at RUB10 bn. As of November 1, 2018, loan-loss provisions were 2.7 times the overdue loans.

Net profit before income tax came at RUB847 bn for 10M 2018, while net profit totaled RUB686 bn, including RUB72.8 bn earned in October.

Total assets increased by 1.9% in October to RUB25.9 trln, mainly due to loan portfolio growth and funds' allocation with the Bank of Russia.

The Bank lent RUB1.0 trln to corporate clients in October, and RUB10.5 trln year to date, which was more than the amount lent in the same period a year ago by 23%. Corporate loan portfolio added 0.3% in October.

The Bank granted almost RUB300 bn in retail loans in October. As a result, the amount of loans issued year to date exceeded RUB2.6 trln, which is 61% more than the amount for 10M 2017. Retail loan portfolio expanded by 2.1% in October and by 21.8% year to date. Sberbank market share in retail lending increased by 0.9 pp to 41.4% in January-September.

The Bank decreased its overdue loans in total loan portfolio from 2.36% to 2.34%, which is substantially below the rest of Russian banks (8.1% as of October 1, 2018).

Securities portfolio decreased by 2.9% due to redemption of CBR bonds along with corporate bonds.

Client deposits and accounts increased by 0.3% in October and by 6.8% year to date or by 3.3% in real terms. Retail deposits grew by 1.9% in October, while corporate funding reduced by 2.5%.  

Core Tier 1 and Tier 1 capital were merely unchanged in October and totaled RUB3,189 bn under preliminary calculations. Total capital increased to RUB4,125 bn on the back of earned net profit in October. Core Tier 1 and Tier 1 capital adequacy ratios were slightly down as of November 1, reflecting a technical one-off in relation to settlement with international payment systems.

* preliminary calculations