Sberbank  / Statement/Miscellaneous

07.04.2015 09:48

Dissemination of a Regulatory Announcement, transmitted by EquityStory.RS, LLC - a company of EQS Group AG.
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Sberbank releases Financial Highlights for Q1, 2015 (under RAS; non-consolidated)

Please note that the numbers are calculated in accordance with Sberbank's internal methodology. Also note that the effect of subsequent events is included from the numbers as of January 1, 2015.

April 7, 2015

Income Statement Highlights for Q1, 2015 (as compared to Q1, 2014):
- Net interest income decreased by 29.0% y-o-y. Interest income increased by 31.5% y-o-y, but interest expenses increased by 111.6% y-o-y on more expensive cost of funding from the CBR and corporate deposits
- Noncredit commission income grew by 14.8% y-o-y, net fee and commission     income decreased by 0.8% y-o-y

- Operating income before total provisions decreased by 22.2% y-o-y
- Total provision charge was RUB78.6 bn vs. RUB70.3 bn charge for Q1,     2014

  - Operating expenses were up by 6.3% y-o-y

- Net profit before income tax reached RUB46.2 bn vs. RUB121.5 bn for Q1,     2014

- Net profit totaled RUB26.3 bn vs. RUB99.3 bn for Q1, 2014. Significant increase in cost of the CBR's funding and cost of client funds (mostly corporate funds) were the main drivers for the decline in Net profit.
Net interest income came at RUB146.2 bn, down by 29.0% compared to that for Q1, 2014:

- Interest income increased by RUB113.7 bn driven by corporate and retail     loan portfolio growth.

- Interest expenses increased by RUB173.3 bn, due to inflow of funds as well as increase of market interest rates. The strongest effect on interest expense came from the CBR funding and corporate deposits that reacted at a faster pace upon the increase in the key interest rate.
Slowdown on interest expenses growth in March continued driven by the gradual decrease in the key interest rate by the CBR from the beginning of 2014. Nevertheless, the CBR funding remains the most expensive source of liquidity. In order to lower the average cost of funding, Sberbank continues reducing its CBR funding and replacing it with clients' funds. In March the share of the CBR funding (excluding the subordinated debt) in total liabilities was reduced by 0.5 p.p. to 10.1% (15.2% as of January 1, 2015).

Net fee and commission income came at RUB58.4 bn in Q1, 2015 that was slightly lower than in Q1, 2014 (RUB58.8 bn). Decline in commission income from corporate lending was offset by noncredit commission income mostly driven by bank cards and acquiring.

Net income from FX revaluation and trading operations on capital markets amounted to RUB2.8 for Q1, 2015. The negative result in March (-RUB14.9 bn) was driven mostly by release of loan-loss provision on FX loans against Ruble appreciation. To read more on the relationship between provision charge and conversion income, please note Sberbank releases Financial Highlights for 11M 2014 (under RAS; non-consolidated).
Operating expenses increased by 6.3% y-o-y for Q1, 2015 due to the increase in staff costs. Starting from February the Bank extended to apply the accrual method in staff remuneration accounting to spread these costs across the year. Please note that comparison to staff costs for the same period of 2014 is not quite correct. Excluding the effect of this adjustment, operating expenses for Q1, 2015 decreased by 1.9% y-o-y. The general trend of cost reduction is achieved by the Bank's cost optimization program, especially in terms of administrative expenses. Bank optimizes procurement system, utilizes real estate more efficient, systemically deals with other expenses.

Total provision charges amounted to RUB78.6 bn vs. RUB70.3 bn charge in Q1, 2015. Comparing to the previous month, total provision charge in March was substantially lower (RUB8.6 bn), due to release of FX provisions on ruble appreciation. The Bank continues to practice a conservative approach in loan-loss provisioning based on requirements of the Central Bank of Russia. Coverage ratio remained strong: loan-loss provisions are 2.3 times the overdue loans.

Net profit before income tax came at RUB46.2 bn for Q1, 2015 vs. RUB121.5 bn a year earlier. Net profit totaled RUB26.3 bn vs. RUB99.3 bn.
Assets decreased by 3.2% in March to reach RUB20.7 trln. The decrease was visible in several line items of assets, including loans to clients and to banks. The major factor that attributed to the decrease was negative revaluation of FX component on ruble appreciation.
The Bank lent over RUB400 bln to corporate clients in March, which is comparable to average monthly volumes of issues. Total corporate loan portfolio decreased by 3.2% in March to RUB11.4 trln primarily from negative revaluation of previously issued FX loans.
The Bank lent about RUB79 bn to retail clients in March, 61% of the issues were mortgages. Yet total retail loan portfolio decreased by RUB19.5 bn in March to reach RUB4.03 trln on large volumes of repayments of consumer unsecured loans.

Overdue loans increased slightly to reach 2.4% of total loans as of April 1, 2015.

Retail deposits and accounts increased by RUB47 bn in March, or up by 0.6%; the ending balances increased in all currencies. Should there have not been the revaluation effect the portfolio would have increased by RUB140 bn, or by 1.6%. The inflow of funds was both to deposits as well as savings certificates. Overall retail deposits and accounts portfolio reached RUB8.62 trln as of April 1, 2015.

Corporate funding decreased by RUB399 bn in March, or down by 7.1%. Overall since the beginning of the year the Bank raised RUB151 bn, or 3.0%, of funding on corporate term deposits.

Core Tier 1 and Tier 1 capital (equal since Sberbank does not have instruments of additional capital) reached RUB1,754 bn as of April 1, 2015 under preliminary calculations. Total capital amounted to RUB2,520 bn on the same date.

In-line with the recent change to the Federal Law №173-FZ on Additional measures of support to the financial system of the Russian Federation effective March 2015 Sberbank amended the terms of its outstanding subordinated loans from the CBR of total nominal value of RUB500 bn: Sberbank elected the option (defined in the Law) to extend the term of the subordinated loans to 50 years at the rate of 6.5% p.a. with a possibility to rollover the duration term without a requirement of a consent from the CBR and an option to negotiate the interest rate after December 31, 2019. Sberbank received a confirmation from the CBR in March 2015 with an approval to include the outstanding subordinated loans in Tier 2 capital.
Risk weighted assets decreased by RUB150 bn in March due to credit risk on Balance Sheets items (RUB237 bn).

Capital adequacy ratios under preliminary calculations as of April 1, 2015 were:

- N1.1 - 8.89% (minimum adequacy level, required by the Central Bank of     Russia at 5.0%)

- N1.2 - 8.89% (minimum adequacy level, required by the Central Bank of     Russia at 6.0%)

- N1.0 - 12.71% (minimum adequacy level, required by the Central Bank of Russia at 10.0%, considering Deposit Insurance Regulation).
Sberbank 1Q, 2015 Financial Highlights (under RAS, non-consolidated)

07.04.2015 The EquityStory.RS, LLC Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de

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Language:           English
Company:            Sberbank
                    19 Vavilova St.
                    117997 Moscow
                    Russia
Phone:              +7-495-957-57-21
Fax:                
E-mail:             media@sberbank.ru
Internet:           www.sberbank.ru
ISIN: US80585Y3080, RU0009029540, RU0009029557, US80585Y4070 Listed: Open Market (Entry Standard) in Frankfurt ; London,                     MICEX, RTS
Category Code:      MSC
TIDM:               SBER
Sequence Number:    2588
Time of Receipt:    Apr 07, 2015 09:17:33
 
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