SBER.L Regulatory News (SBER)

Sberbank releases Financial Highlights for January 2020 (under RAS; non-consolidated)

The numbers are calculated in accordance with Sberbank's internal methodology.

Please note that some minor changes became effective in Sberbank's internal methodology starting from January 1, 2020. Therefore, the numbers for 2019 have been recalculated to make them comparable.

The effect of subsequent events is excluded from the numbers as of January 1, 2020.February 7, 2020

Key highlights for January 2020:

Deputy Chairman of Sberbank Alexander Morozov stated:

"Despite the seasonal slowdown, Sberbank expanded its loan portfolio, issuing a record amount of loans of over RUB1.1 trn in January. Implementation of advanced technologies was of a great support to this performance. Almost 30% of mortgages and 60% of consumer loans come through digital channels. That helped to deliver Return on Assets at 3.4%."

Comments for January 2020:

Net interest income increased by 8.8% as compared to January 2019 and amounted to RUB111.5 bn. The increase was supported by retail loan portfolio expansion and gradual decline in the cost of funding.

Net fee and commission income was up by 22.9% to RUB36.3 bn. The largest contributors to fee income growth were operations with bank cards and settlement transactions for corporate clients, benefiting from the Bank's initiatives in 2H2019 to support these business activities. Furthermore, the dynamics of net fee and commission income remained affected by the transition to even recognition of annual service fees on bank cards, settlements with payment systems and loyalty program costs which was implemented gradually in 2019. Net fee and commission income growth in the comparable methodology would have been 15.4% as compared to January 2019.

Operating expenses increased by 4.7% as compared to January 2019. Cost-to-income ratio came in at 24.9%.

Total provision charge including fair-value revaluation totaled RUB26.3 bn in January 2020 vs the release of RUB3.4 bn a year ago, driven largely by revaluation of provisions on the FX-part of the loan portfolio as a result of the opposite directions in FX dynamics for comparable periods. Loan-loss provisions were 2.8 times the overdue loans as of February 1, 2020.

Net profit before income tax increased by 10.9% to RUB96.3 bn, while net profit was up by 8.9% to RUB80.2 bn.

Total assets remained unchanged in January at RUB27.7 trn.

The Bank lent RUB874 bn to corporate clients in January, which was a record for the month and 31% higher than a year ago. In the meantime, the loan portfolio was barely unchanged on the back of significant redemptions.

Loan issuance to retail clients in the amount of RUB258 bn was also a record for January and 16% higher than a year ago. Retail loan portfolio added 0.8% for the month.

The share of overdues in the total loan portfolio increased from 2.17% to 2.21% in January.

Changes in the securities portfolio were triggered by redemption of OFZs and purchases of CBR bonds. Meanwhile, the outstanding balance remained at RUB3.3 trn.

Retail deposits and accounts decreased by RUB356 bn or 2.6%, reflecting seasonal outflows from bank cards' balances during the New Year holidays. Corporate accounts were up by RUB50 bn or 0.8% in January.

Sberbank issued RUB35 bn of four-year exchange-traded bonds in January.

Core Tier 1 and Tier 1 capital remained virtually unchanged in January. Earnings for the period of April 2019 - January 2020 will be accounted for in capital calculation as soon as the audit is completed. Total capital decreased in January due to the partial exclusion of the CBR subordinated debt from capital calculation according to the CBR regulation No646-P. In the meantime, the total capital was supported by net profit for January.

Risk-weighted assets increased by RUB132 bn, mainly due to the loan portfolio expansion.

* preliminary calculations

Sberbank Financial Highlights for January 2020 (under RAS, non-consolidated)