SBER.L Regulatory News (SBER)

Sberbank releases Financial Highlights for 11M 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. December 07, 2018

Key highlights for November 2018:

Deputy Chairman of Sberbank Alexander Morozov stated:

 "Sberbank had a 177-anniversary in November and marked its celebration by a "Green Day" promo campaign having invited over 400 partners to participate. As a result of this campaign the Bank collected a record amount of loan applications and increased sales of products from companies of its ecosystem. This gives a good ground to expect further growth of interest and fees income. Operations with bank cards remain a sustainable driver to fees growth."

Comments for 11M 2018:

Net interest income increased by 3.9% compared to 11M 2017 and totaled RUB1,144 bn mostly driven by increasing amount of working assets.

Net fee and commission income grew by 19.8% to RUB384 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 (9.2% y/y). The Bank keeps on transiting to a more even allocation of accrued expenses specifically related to annual leaves and remuneration of employees throughout the year. Also, the Bank continues its internal reorganization by moving part of the staff from Sberbank Technologies JSC to Sberbank PJSC starting from summer without causing any changes to the headcount of Sberbank Group.

Cost-to-income ratio for 11M 2018 improved to 29.3% as compared to 30.1% for the same period a year ago.

Provision charges for 11M 2018 amounted to RUB238 bn, which was 15.2% lower as compared to the same period a year ago. As of December 1, 2018, loan-loss provisions were 2.7 times the overdue loans.

Net profit before income tax came at RUB934 bn for 11M 2018, while net profit totaled RUB759 bn, including RUB73.3 bn earned in November.

Total assets increased by 1.6% in November to RUB26.3 trln, mainly due to loan portfolio growth and investments in securities.

The Bank lent over RUB1.0 trln to corporate clients in November, and RUB11.5 trln year to date, which was more than the amount lent in the same period a year ago by 20%. Corporate loan portfolio added 0.7% to RUB13.2 trln in November.

The Bank granted almost RUB290 bn in retail loans in November. An average monthly volume of retail loan issuances has been 1.6 times higher than a year ago. As a result, the amount of loans issued year to date exceeded RUB2.9 trln. Retail loan portfolio expanded by 1.9% in November and by 24.1% year to date. Sberbank market share in retail lending increased by 1.1 pp to 41.6% in January-October.

The Bank decreased its overdue loans by RUB1.6 bn led by the corporate segment. The share of overdue loans in total loan portfolio from 2.34% to 2.31%, which is substantially below the rest of Russian banks (8.1% as of November 1, 2018).

Securities portfolio increased by RUB325 bn or 12.1% specifically due to purchases of CBR bonds for liquidity management purpose.

Client deposits and accounts increased by 1.6% in November, where corporate funding grew by 5.2% and retail deposits were down by 0.3%. Sberbank saw an increase of RUB190 bn in term deposits in November, including FX-denominated deposits in the amount of USD300 mn. A decrease in the outstanding balance of bank card accounts reflected a one-off settlement transaction with international payment systems at the beginning of November. Year to date, client funding increased by 8.5%.

Core Tier 1 and Tier 1 capital remained merely unchanged in November at RUB3,188 bn under preliminary calculations. Total capital increased by 1.6% to RUB4,196 bn on the back of earned net profit. Core Tier 1 and Tier 1 capital adequacy ratios decreased as of December 1, as a result of loan portfolio expansion and investment in subsidiaries, with the latter reflecting investments to establish Sberbank headquarters at a single location at the West of Moscow.  

* preliminary calculations