Sberbank / Quarter Results/Quarter Results
26.08.2015 11:11

Dissemination of a Regulatory Announcement, transmitted by EquityStory.RS, LLC - a company of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Sberbank publishes Interim Condensed Consolidated Financial Statements in accordance with International Financial Reporting Standards (IFRS) as at 30 June 2015 and for the six months then ended
Sberbank (hereafter 'the Group') has released its interim condensed consolidated IFRS financial statements (hereafter 'the Financial Statements') as at 30 June 2015 and for the six months ended 30 June 2015, with review report by Ernst & Young Vneshaudit.

'One of the key achievements in the reporting period was the 13.4% increase in capital adequacy ratio. This improvement was mainly driven by a 78.4% growth in quarterly net profit, which amounted to RUB 54.6 bn. The ability to organically increase capital in tough economic conditions once again highlights Sberbank solid fundamentals' - stated Alexander Morozov, Deputy Chairman of the Board.

Income Statement and Total Comprehensive Income highlights:
- Net profit for Q2, 2015 increased by 78.4%, to RUB 54.6 bn (RUB 2.50 per ordinary share) compared to RUB 30.6 bn (RUB 1.42 per ordinary     share) for Q1, 2015.

- Net profit for the six months ended 30 June 2015 decreased to RUB 85.2 bn (RUB 3.92 per ordinary share) compared to RUB 170.4 bn (RUB 7.79 per     ordinary share) for 1H 2014.

- Total comprehensive income for 1H 2015 remained stable at RUB 152.1 bn     compared to RUB 149.4 bn for 1H 2014.

- Net interest income for 1H 2015 declined by 12.8% to RUB 427.4 bn,     compared to RUB 489.9 bn for 1H 2014.

- Net fee and commission income for 1H 2015 increased by 17.3% to RUB 146.8 bn, compared to RUB 125.1 bn for 1H 2014.
- The Group's operating income before provision charge for impairment of debt financial assets for 1H 2015 increased by 3.6% to RUB 643.7 bn     compared to RUB 621.1 bn for 1H 2014.

- Operating expenses for 1H 2015 increased by 12.4% year-on-year while Cost to Income ratio in Q2, 2015 improved to 43.3% compared to 45.8% in Q1, 2015. This ratio for 1H 2015 was equal to 44.5% versus 41.0% in 1H     2014.

- Net provision charge for loan impairment for 1H 2015 amounted to RUB 232.4 bn, translating to Cost of risk of 250 basis points.
Statement of financial position highlights:

- As of 30 June 2015, the Group's total assets reached RUB 23,657.0 bn showing a 6.1% decline compared to the 2014 year end.
- For 1H 2015, net loans and advances to customers decreased by 5.6% to RUB 16,755.9 bn compared to RUB 17,756.6 bn at 2014 year end.
- The proportion of gross non-performing loans in Group's total gross loans increased to 4.9% as of 30 June 2015 (31 December 2014: 3.2%).
- Customer deposits increased by 1.8% to RUB 15,850.1 bn compared to RUB     15,562.9 bn at the 2014 year end.

- Loan to deposit ratio reached 102.2% as of 30 June 2015 as compared to     110.8% at 2014 year end.

- The Group's Equity increased for 1H 2015 by 7.1% to RUB 2,162.6 bn.
- The total capital adequacy ratio (Basel I) improved by 130 basis points for 1H 2015 to 13.4%. The core capital adequacy ratio increased by 100     basis points to 9.6%.

Financial and Operating Review:

Interest income for 1H 2015 increased by 29.1% year-on-year to RUB 1,106.5 bn. The increase was attributable to higher interest rates on corporate loans and higher volume of interest earning assets.
Interest expenses (including deposit insurance expenses) for 1H 2015 increased by 84.8% year-on-year to RUB 679.1 bn driven by cost of corporate term deposits and borrowings from the Central Bank of Russia. In Q2, 2015 those expenses decreased by RUB 62.6 bn as compared to Q1, 2015.
Net interest income for 1H 2015 totaled RUB 427.4 bn, a 12.8% decrease year-on-year. The decrease is caused by the outpacing growth of interest expenses over income due to the rapid rise of funding costs. During Q2, 2015 net interest income increased by 13.4% as compared to Q1, 2015.
The Group's net fee and commission income for 1H 2015 totaled RUB 146.8 bn, a 17.3% increase year-on-year. Income from cash and settlement transactions of individuals and legal entities and acquiring were key drivers of growth further supported by commission income from operations in foreign currencies.

Total operating income before provision charge for impairment of debt financial instruments for 1H 2015 reached RUB 643.7 bn compared to RUB 621.1 bn for 1H 2014, a 3.6% increase year-on-year.
Net provision charge for loan impairment for 1H 2015 totaled RUB 232.4 bn compared to RUB 150.9 bn for 1H 2014 translating into Cost of risk of 250 basis points versus 210 basis points for 1H 2014. The main drivers of the provision charge growth were general deterioration of the loan quality in view of slowdown of the Russian economy and creation of provisions for Ukrainian borrowers due to further deterioration of the Ukrainian economy.
The Group's operating expenses for 1H 2015 increased by 12.4% year-on-year to RUB 286.3 bn. The growth of operating expenses is primarily explained by the increased rouble equivalent of operating expenses of foreign subsidiaries.

The Group's net profit for 1H 2015 reached RUB 85.2 bn versus RUB 170.4 bn for 1H 2014, a RUB 85.2 bn decrease year-on-year. This decrease is explained mostly by net interest income dynamic and a RUB 81.5 bn increase in net provision charge for loan impairment as compared to 1H 2014. Net profit for Q2, 2015 increased by 78.4%, to RUB 54.6 bn compared to RUB 30.6 bn for Q1, 2015 mainly due to decrease in cost of funding.
Total comprehensive income for 1H 2015 remained stable at RUB 152.1 bn compared to RUB 149.4 bn for 1H 2014 due to positive revaluation of portfolio of investment securities availiable-for-sale.
As of 30 June 2015, the Group's total assets reached RUB 23,657.0 bn, a 6.1% decrease since 31 December 2014.

In 1H 2015, the Group's gross loan portfolio before provision for loan impairment decreased by 4.5%. Gross loans to corporate clients decreased by 5.5% to RUB 13,019.4 bn due to the decrease in quality solvent demand; total loans to individuals decreased by 1.8% to RUB 4,761.6 bn, thus volume of mortgage loans within total loans to individuals increased by 4.8%.

The proportion of non-performing loans (NPL), defined as loans for which payment of principal and/or interest is overdue by more than 90 days, in the total loan portfolio (the NPL ratio) increased to 4.9% as at 30 June 2015 compared to 3.2% at the 2014 year end. The NPL coverage ratio (total provisions for loan impairment to non-performing loans) decreased to 1.2 for 1H 2015 due to the recognition within NPL of loans which were significantly provided for impairment in earlier periods.
Provision for loan impairment increased for 1H 2015 by 17.9% reaching RUB 1,025.1 bn. As of 30 June 2015, the proportion of provisions for loan impairment to total gross loans was 5.8% compared to 4.7% at 2014 year end.
As of 30 June 2015, the Group's total liabilities amounted to RUB 21,494.4 bn, a 7.3% decrease in 1H 2015 while retail deposits totaled RUB 9,981.0 bn (7.0% increase). Retail deposits remain the core source of the Group's funding, accounting for 46.4% of the Group's total liabilities. Corporate deposits decreased by 5.9% in 1H 2015 to RUB 5,869.1 bn as at 30 June 2015 being more expensive and short-term source or funds, while their share in total liabilities was 27.3%.

As of 30 June 2015, the Group's amounts due to banks totaled 2,023.6 bn, a 44.4% decrease since the beginning of 2015. The increase in customer accounts of the Group in 1H 2015 allowed a RUB 1,497.7 bn reduction of its exposure to the Central Bank of Russia, being one of the most expensive source of the Group's funding.

Loan to deposit ratio improved in 1H 2015 to 102.2% as compared to 2014 year end (110.8%) following the increase in retail deposits on the back of loan portfolio contraction.

The Group's equity amounted to RUB 2,162.6 bn as at 30 June 2015, a 7.1% increase for 1H 2015. The main sources for the increase were gains on revaluation of securities available-for-sale and net profit earned for the reporting period. The Group's total capital adequacy ratio as per Basel I reached 13.4% and the Tier 1 ratio was 9.6%. The improvement of the capital adequacy ratios as of 30 June 2015 is mostly explained by an increase in equity and reduction of risk weighted assets.

Sberbank Group's Financial Highlights for the six months ended 30 June 2015

26.08.2015 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:      IR
TIDM:               SBER
Sequence Number:    2816
Time of Receipt:    Aug 26, 2015 10:40:37
 
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