Sberbank releases Financial Highlights for 2019, excluding the effect of subsequent events

(under RAS, non-consolidated)

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

Please note that some changes became effective in the Russian accounting standards in 2019 as part of convergence with IFRS, including transition to IFRS 9.

The effect of subsequent events is included in the numbers as of January 1, 2019 but excluded from the numbers as of January 1, 2020.

January 15, 2020 

Key highlights for December:

• The Bank earned RUB55.9 bn;
• Total loan issuance hit a record of over RUB2.5 trn. Monthly volumes of loan issuance were historically high both in the retail segment at over RUB340 bn and in the corporate segment at RUB2.2 trn;
• The Bank executed mortgage securitization worth RUB24 bn in December.

Key highlights for 2019:

• The Bank earned RUB870.1 bn, excluding the effect of subsequent events;
• Total loans issued amounted to RUB16.3 trn;
• The retail loan portfolio expanded for the year by 17.4%;
• Client deposits and accounts adjusted for FX-revaluation expanded by 4.4%.

Deputy Chairman of Sberbank Alexander Morozov stated:

 "Net profit for 2019 excluding the effect of subsequent events amounted to RUB870.1 bn. The loan portfolio expanded by a solid 6.8% in real terms. Retail deposits grew by 6.6%, while their cost became noticeably lower. This benefited net interest income growth in 4Q19 as well as for the full year. Return on Equity came in at over 20% for the year, which gives basis to expect Strategy 2020 targets being achieved." 

 

 

Comments for 2019:

Net interest income increased by 0.6% for the year to RUB1.26 trn. In 2H2019, cost of liabilities started to decline due to Sberbank's initiatives and lower market rates. As a result, net interest income was up by 4.0% yoy in December 2019.

Net fee and commission income grew by 9.9% to RUB469.5 bn for the year, driven largely by transactional business. The dynamics of net fee and commission income was affected by accounting for fees paid to payment systems and loyalty program costs as the Bank started accruing these fee expenses evenly in 2020.

Operating expenses increased by 7.5%. OpEx dynamics was affected by transfer of employees from Sberbank Technologies JSC to Sberbank PJSC over the second half of 2018, VAT rate increase from January 1, 2019 and annual wage increase in July 2019. Cost-to-income ratio came in at 33.9% in 2019.

Total provision charge including fair-value revaluation and impairments related to purchased or originated credit-impaired loans amounted to RUB4.8 bn in December. The subdued amount for the month was influenced by significant ruble appreciation. The charge for 2019 came in at RUB122.8 bn, which is 2.3 times lower the amount booked for 2018. This decrease was due to the opposite directions of FX rate dynamics for comparable periods as well as restructuring of the Agrokor debt completed in June 2019. Loan-loss provisions were 2.9 times that of the overdue loans as of January 1, 2020.

 

Net profit before tax grew by 11.9% to RUB1,088.6 bn 2019. Net profit excluding the effect of subsequent events increased by 11.2% to RUB870.1 bn.

Total assets came in at RUB27.7 trn and decreased by 0.5% due to ruble appreciation. Total assets excluding FX-revaluation expanded by 0.1% in December and by 5.3% in 2019.

The Bank lent RUB2.2 trn in loans to corporate clients in December, which is the highest monthly issuance for the year. Year to date, the Bank originated RUB13.0 trn. Corporate loan portfolio grew by 1.9% or RUB243 bn in December excluding FX-revaluation. 

Loans issuance to retail clients was also the highest in December - RUB340 bn and over RUB3.4 trn year to date. Retail loan portfolio expanded by 0.6% or RUB40 bn for the month. The Bank executed mortgage securitization worth RUB24 bn in December. The deal led to the capital management optimization and increased liquidity reserves. Excluding this transaction, retail portfolio growth would have been 0.9% in December.

Overdue loans decreased by RUB3.1 bn in December led by the corporate segment. The share of overdue loans in the total loan portfolio went down from 2.21% to 2.18%.

Securities portfolio decreased by 1.2% or RUB41 bn in December mainly on sale of CBR bonds.

Retail deposits were up by 4.7% or RUB609 bn in December excluding the impact of FX revaluation which more than doubled the seasonal outflow of corporate accounts. Combined client deposits and accounts increased by 4.4% for the year excluding the impact of FX revaluation: retail accounts were up by 6.6%, while corporate accounts added 0.3%. 

Core Tier 1 and Tier 1 capital remained virtually unchanged in December. Earnings for the period of April-December 2019 will be accounted for in capital calculation as soon as annual audit is completed. Total capital increased by RUB56 bn or 1.2% in December, driven mainly by net profit for the period.

Risk-weighted assets increased in December by RUB502 bn, mainly due to the loan portfolio expansion.

Capital, RUB bn	1 Jan'20*	1 Dec'19	1 Jan'20*/ 1 Dec'19	1 Jan'19	1 Jan'20*/ 1 Jan'19
Core Tier 1 capital N1.1	3,306	3,320	(0.4%)	3,178	4.0%
Tier 1 capital N1.2	3,306	3,320	(0.4%)	3,178	4.0%
Total capital N1.0	4,566	4,510	1.2%	4,244	7.6%
Capital adequacy ratios, %
Core Tier 1 capital N1.1, min. 4.5%	10.65%	10.87%	(0.22 p.p.)	11.11%	(0.46 p.p.)
Tier 1 capital N1.2, min. 6.0%	10.65%	10.87%	(0.22 p.p.)	11.11%	(0.46 p.p.)
Total capital N1.0, min. 8.0%	14.67%	14.73%	(0.06 p.p.)	14.84%	(0.17 p.p.)
Risk-weighted assets, RUB bn	31 124	30 622	1.6%	28 596	8.8%

* preliminary calculations

 

 

Sberbank Financial Highlights for 12M 2019 (under RAS, non-consolidated)