Sberbank / Key word(s): Statement/Miscellaneous
25.11.2015 08:56

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Sberbank reports third-quarter 2015 Net Profit of RUB65.1 bn, or RUB3.04 per ordinary share, under International Financial Reporting Standards (IFRS)

November 25, 2015

http://sberbank.com/common/img/uploaded/files/info/Word_Eng_9m2015tblfin.p df

Moscow, November 25, 2015 - Sberbank (hereafter "the Group") has released its interim condensed consolidated IFRS financial statements (hereafter "the Financial Statements") as at and for the 9 months ended 30 September 2015, with review report by Ernst & Young Vneshaudit.
"Continued recovery in the net interest income, higher mortgage originations and strong focus on operating efficiency contributed to our strongest quarterly earnings this year," said Alexander Morozov, Deputy Chairman of the Executive Board and Chief Financial Officer.
The Q3 2015 Business Highlights:

* Sberbank's net profit reached RUB65.1 bn, or RUB3.04 per ordinary share, for the quarter

* Mortgages portfolio continued to grow to RUB2.5 trn, up by 4.4% in Q3 2015 compared to Q2 2015. Sberbank's domestic market share reached 55.1%
* Client deposits growth up 15.4% to RUB18.3 trn in Q3 2015 compared to Q2 2015

* Net loan-to-deposit ratio came at 95.3% on the back of the improving funding base

* The quarterly net fee and commission income came at RUB81.9 bn, a strong 28.0% growth from the year-ago period

* Cost-to-income ratio down to 39.6%, supported by disciplined cost control and improving revenue growth

Net interest income was RUB263.4 bn in Q3 2015, up by 3.2% from the year-ago period:

* Interest income (up 25.0% to RUB574.2 bn compared to Q3 2014) was driven by a moderate pick up in corporate lending and mortgages. Yield on total loans increased by 40 basis points to 11.4% in Q3 2015.
* Interest expenses including deposit insurance expenses increased by 52.2% from Q3 2014 to RUB310.8 bn. It was driven by the both higher volumes and costs of client deposits. However, the cost of client deposits decreased by 10 basis points to 5.4% in Q3 2015 relative to Q2 2015. The amount of funds borrowed from the Central Bank of Russia was reduced by 51.0% in Q3 2015 to RUB1.0 trn. Improved access to liquidity allows Sberbank to be more flexible in managing its cost of funding.

The Group's Q3 2015 net fee and commission income came at RUB81.9 bn. The income from cash and settlement transactions business (RUB76.9 bn) accounted for a strong 77.5% share in total fees and commissions income in the third quarter. Sberbank continued to strengthen its domestic market shares in acquiring at 53% and credit cards at 36.5%. Income from the banking cards operations increased by 21.8% in Q3 2015 from the same period a year ago.

Net provision charge for loan impairment for Q3 2015 totaled RUB128.4 bn compared to RUB102.7 bn for Q3 2014. This translated into the cost of risk of 279 basis points for the quarter versus 268 basis points a year ago.
* Increase in the cost of risk was driven primarily by the need to create additional provisions for the revaluation of foreign currency denominated loans as Ruble devaluated during the quarter (Ruble devaluated 19.3% relative to USD) and for the Ukrainian assets due to high level of economic instability.

* Consequently, the cost of risk for corporate loans increased by 54 basis points to 302 basis points in Q3 2015 relative to the previous quarter of 2015.

* The cost of risk for retail loans dropped by 86 basis points to 211 basis points in Q3 2015 relative to the previous quarter of 2015 on improving retail portfolio mix.

The Group's operating expenses for Q3 2015 increased to RUB145.4 bn, up by 9.1% from the same period a year ago. Sberbank standalone operating expenses increased by 9.8% from the same period a year ago to RUB112.5 bn under internal calculations, which was significantly slower than the domestic inflation of 15.7% for the same period.

Total loans, net, increased by 7.1% to RUB17,948.7 bn in Q3 2015 as compared to Q2 2015. The growth of the corporate loan portfolio was driven by the Ruble denominated lending. The increase of retail loans was driven by a healthy demand for mortgages.

Client deposits demonstrated strong growth, which was achieved in both retail and corporate segments, up by 9.1% and 26.0% respectively in Q3 2015 as compared to the previous quarter of 2015. Current accounts increased by 16.4% in the same period.

Total NPL ratio increased to 5.4% in Q3 2015 from 4.9% in the previous quarter of 2015 mainly driven by the corporate segment. Coverage level of the NPL portfolio by provisions decreased to 1.1X in Q3 2015 from 1.2X in the previous quarter as new non-performing loans were well covered by collateral.

Renegotiated loan portfolio increased by RUB573.4 bn, or up by 21.1% in Q3 2015 relative to the previous quarter of 2015 to RUB3.3 trn primarily driven by Ruble devaluation and the increase in the corporate specialized loans segment (up by RUB420.2 bn in Q3 2015 relative to the previous quarter of 2015 to RUB1.9 trn). The increase in the latter is explained by the extension of several project finance loans. The specific coverage of non-performing loans in the renegotiated loan portfolio remained high at 78.6%, slightly up by 20 basis points relative to the coverage level in Q2 2015 of 78.4%.

The Group's total capital increased by 4.3% to RUB3.0 trn in Q3 2015 relative to Q2 2015 primarily as a result of retained net profit for the quarter. Revaluation of the subordinated debt and foreign currency translation reserve affected by Ruble devaluation were also supportive.
The Group's risk-weighted assets increased by 8.3% in Q3 2015 from Q2 2015 to RUB23.6 trn. The total capital adequacy ratio (Basel I) declined by 50 basis points in Q3 2015 from Q2 2015 to 12.9%. The core capital adequacy ratio decreased by 50 basis points in Q3 2015 from Q2 2015 to 9.1%.

25.11.2015 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
 
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