SBER.L Regulatory News (SBER)

Sberbank releases Financial Highlights for 4 months of 2021 (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, 2021. Therefore, the numbers for 2020 have been recalculated to make them comparable.

May 11, 2021

Key highlights for April:

Alexandra Buriko, CFO, stated:

"In April, the pace of business growth was influenced by the low-base effect of 2020. Even so, it is worth noting the positive dynamics on a monthly basis: we issued a record volume of retail loans, increased our mortgage portfolio by 2.9% and raised additional retail funding by more than 4%. Cost to income ratio stayed below 30%. As a result, we earned RUB386 bn in net profit for the first four months, and ROE came in at 24.1%. A meaningful event in April was the transition to a standardized approach to calculate operational risk, which will allow us to increase the efficiency of capital usage."

Comments for 4M 2021:

Net interest income increased by 12.9% y/y, and amounted to RUB503.0 bn, due to loan portfolio expansion. A positive impact still comes from the decrease in allocations to deposit insurance fund, which was implemented in May 2020.

Net fee and commission income totaled RUB175.4 bn, up by 16.3% as compared to the same period last year. This growth owes mainly to the low-base effect of April 2020, when transactional activity collapsed amid the pandemic-related lockdown constraints (net fee and commission income rebounded by 55.6% y/y in April 2021). Main growth drivers were banking cards transactions and acquiring, which were the most distressed last April: combined growth for 4 months was 28% y/y. Alongside the economic recovery, income also increases from client settlement transactions: 18% y/y for 4 months.

Operating expenses amounted to RUB207.3 bn, and were up by 10.5% y/y. The dynamics owed to low level of operating expenses in March-April 2020 amid the non-working days and subdued business activity as well as smoother calendarization for OpEx in 2021. Cost-to-income ratio came in at 27.6%. 

Total provision charge including fair-value revaluation was RUB67.7 bn in 4M 2021. In April, provision charge amounted to RUB13.6 bn, including provision release of RUB4.8 bn on FX-loans due to the dynamics of exchange rates for main currencies. Loan-loss provisions stayed stable at 2.2 times that of the overdue loans. 

Net profit before income tax for 4M 2021 increased 1.7-times y/y, and came in at RUB477.2 bn. Net profit was also 1.7-times higher y/y, and amounted to RUB386.1 bn.

Total assets in April increased by 2.0%, adjusted for FX revaluation, and exceeded RUB35 trn, mainly from retail lending growth.

The Bank issued RUB1.2 trn in loans to corporate clients in April. The corporate loan portfolio was up by 0.6%, adjusted for FX revaluation, mainly from lending growth in Rubles, to RUB15.6 trn as of May 1, 2021. The dynamics within the portfolio were explained by the termination of the state subsidized program of lending at 2% and respective reduction of the corporate loan book.

Loan production to retail clients hit a record in the amount of RUB526 bn in April. The monthly pace of retail portfolio growth accelerated further to 2.4%. As a result, total retail portfolio exceeded RUB9 trn as of May 1, 2021. The main growth driver continues to be mortgages, with the portfolio up by 2.9% in April.

Share of overdue loans in total loan portfolio came down by 0.05 pp to 3.15% in April, driven by both retail and corporate loans.

Securities portfolio was down by 0.4% to RUB5.17 trn in April from the OFZ and corporate bonds.

Retail client funding in April increased by RUB680 bn, or 4.4%, adjusted for FX revaluation, to exceed RUB16.1 trn as of May 1, 2021. The strong dynamics for the month were explained by the additional non-working days between the May holidays, and payroll and pension distribution in April. The growth also continued in the ending balances of the escrow accounts, supported by high volumes of mortgage lending.

Corporate client funding in April came down by 1.2%, adjusted for FX revaluation, to RUB7.5 tn as of May 1, 2021. The decrease in the ending balances was explained by the tax payments, as well as payroll distribution to employees before the May holidays.

The total client funding overall were up for the month by 2.5%, adjusted for FX revaluation, to reach RUB23.7 trn.

Core Tier 1 and Tier 1 capital changed insignificantly in April to RUB4,296 bn and RUB4,446 bn respectively as of May 1, 2021. 

Total capital in April increased by 2.5%, or by RUB121 bn, to RUB4,976 bn mainly due to earnings for the period.

Risk-weighted assets* in April decreased by 2.4%, or by RUB0.8 trn, mainly due to the transition to a standardized approach in calculating operational risk under the Central Bank Regulation #744-P, the effect from which was RUB-1.1 trn. As a result, risk-weighted assets were RUB31.6 trn as of May 1, 2021, under preliminary calculations. 

* preliminary calculations

Sberbank Financial Highlights for 4 months 2021 (under RAS, non-consolidated)