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Sberbank (SBER)
07-Aug-2020 / 10:04 MSK
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Sberbank releases Financial Highlights for 7 months of 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.
August 7, 2020
Key highlights for July 2020:
- In July, the Bank earned RUB65.6 bn in net profit, ROE came in at 15.9% for the month;
- Combined loan portfolio was up by 0.9% in July, excluding the effect of FX revaluation, with retail portfolio expanding by 1.8%, which was the most noticeable monthly increase from the beginning of last year, driven both by mortgages (+2.1%) and consumer lending (+1.8%). The Bank produced a record loan amount of RUB384 bn to retail clients, which was 1.4 times the amount of loans produced a year ago;
- Retail client accounts increased by 1.3% and were up 0.4% excluding the effect of FX revaluation;
- Operating income before provisions grew by 36% yoy, mainly due to net interest income and net trading income.
Alexandra Buriko, CFO, stated:
"In July, Sberbank had a solid increase in corporate and retail lending as demand for loans recovered, among other factors, on the back of lower interest rates and considerable support measures to both community and business. The volume of restructured loans marginally increased as the majority of applications were processed in previous months. At the same time, we are cautious about the quality of the loan portfolio going forward. Current revenue trends benefit the profitability of the Bank, which along with cost optimization efforts support growth in returns on capital - ROE for the month came in as high as 16%."
Comments for 7M 2020:
Net interest income increased by 12.7% as compared to 7M 2019 and amounted to RUB809.4 bn. The increase was driven mainly by lower cost of funding and the effect of reduced allocations for deposit insurance from the beginning of the year.
Net fee and commission income was up by 8.8% to RUB274.2 bn, mainly due to growing net income from settlement transactions along with client operations on financial markets and gradual recovery in transaction activity in bank cards.
Operating expenses amounted to RUB337.2 bn for 7M 2020, up by 3.9% yoy. In July, operating expenses declined by 0.4% yoy as a result of the pandemic-related efficiency enhancement program and the levelling of the base effect from payroll indexation in July 2019.
Positive trend for cost-to-income ratio remained intact for 7M 2020: 27.1% vs 31.6% a year ago.
Total credit risk charge including fair-value revaluation amounted to RUB68.7 bn in July. The charge was impacted by a weaker ruble, which led to incremental provisions of about RUB28 bn on FX loans without quality deterioration. This was offset by the respective positive revaluation in trading income and had no impact on the bottom line. For 7M 2020, provisions totaled RUB409.4 bn vs RUB52.8 bn a year ago, which owed to the COVID-19 related global distress. Loan coverage ratio came at 2.2 times overdue loans.
Net profit before income tax for 7M 2020 came in at RUB498.7 bn.
Net profit amounted to RUB403.1 bn. High profit tax in July resulted from additional taxes accrued for 2Q 2020. Effective tax rate for 7M 2020 was 19.2%.
Total assets increased by 1.7% to RUB30.4 trn. The increase was mainly due to positive FX revaluation. Adjusted for FX revaluation effect, assets were up by 0.4%.
The Bank issued RUB0.9 trn to corporate clients in July and over RUB7.0 trn for 7M 2020, which was 26% higher than a year ago. The Bank remains actively involved in business support initiatives from the state. Under the state program '2% Loan' launched in June, the Bank approved loans for RUB207 bn. Corporate loans portfolio amounted to RUB14.4 trn, up by 2.3% for the month and by 0.4% excluding the effect of FX revaluation. The corporate exposure that was restructured under own or state programs was scarcely changed in July.
Loan production to retail clients in July hit a record of RUB384 bn, which was 1.4 times the amount produced last July. Growth was evenly driven by consumer loans and mortgages. Mortgage issuance hit a monthly record of RUB190 bn, including both state and Bank's own subsidized mortgage programs. As a result, retail portfolio expanded by 1.8% or RUB135 bn, the largest monthly increase since the beginning of 2019. The outstanding balance of retail loans totaled RUB7.7 trn as of August 1, 2020.
The share of overdues in the total loan portfolio came at 3.3% as of end of July.
The outstanding securities portfolio balance increased by 7.0% to RUB3.9 trn in July, mainly due to purchases of the CBR bonds.
Client funding increased by 0.7% in July. Retail funding was up by 1.3%, while corporate finding reduced by 0.4%. Overall, client funding year to date added 2.3% excluding the effect of FX revaluation and grew by 7.0% in nominal terms.
Core Tier 1 and Tier 1 capital remained virtually unchanged at RUB3,994 bn. Total capital increased in July by RUB18 bn, due to the net profit for the period. Total capital was negatively impacted by deferred income tax and reduction in profit recognized in equity due to the adjustments provided by the Bank of Russia Regulation No. 646-P "On the methodology for determining shareholder equity (capital) of credit institutions (Basel III)" and net profit for April.
The risk-weighted assets increased by 1.4% or RUB0.4 trn in July, driven by loan portfolio expansion including the effect from FX revaluation as well as macro add-ons applicable to newly issued retail loans.
| Capital, RUB bn |
|
1 Aug'20* |
1 July'20 |
1 Aug'20*/
1 July'20 |
|
1 Jan'20 |
1 Aug'20*/
1 Jan'20 |
| Core Tier 1 capital N1.1 |
|
3,994 |
3,993 |
0.02% |
|
3,300 |
21.0% |
| Tier 1 capital N1.2 |
|
3,994 |
3,993 |
0.02% |
|
3,300 |
21.0% |
| Total capital N1.0 |
|
4,643 |
4,625 |
0.4% |
|
4,568 |
1.6% |
| Capital adequacy ratios, % |
|
|
|
|
|
|
|
| Core Tier 1 capital N1.1, min 4.5% |
|
13.45% |
13.64% |
-0.19 pp |
|
10.51% |
2.94 pp |
| Tier 1 capital N1.2, min 6.0% |
|
13.45% |
13.64% |
-0.19 pp |
|
10.51% |
2.94 pp |
| Total capital N1.0, min 8.0% |
|
15.61% |
15.77% |
-0.16 pp |
|
14.52% |
1.09 pp |
| Risk-weighted assets, RUB bn |
|
29,745 |
29,333 |
1.4% |
|
31,470 |
-5.5% |
* preliminary calculations
Sberbank Financial Highlights for 7M 2020 (under RAS, non-consolidated)
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