Sberbank releases Financial Highlights for 10M 2019 (under RAS; non-consolidated)
Please note that the numbers are calculated in accordance with Sberbank's internal methodology.
Also note that some changes became effective in the Russian accounting standards in 2019 as part of convergence with IFRS, including transition to IFRS 9.
November 08, 2019
Key highlights for October 2019:
- In October the Bank earned RUB74.1 bn.
- The Bank issued RUB290 bn loans to retail clients in October and retail loan portfolio exceeded RUB7 trn.
- In the corporate segment the Bank issued RUB1.4 trn in October, which was the largest amount since early 2018, and RUB9.2 trn year to date.
- Retail loans grew by 1.5%, while corporate loan portfolio growth adjusted for FX revaluation was 1.1%.
Deputy Chairman of Sberbank Alexander Morozov stated:
"Positive momentum in net interest income in October resulted from optimization of cost of funding and expansion of loan portfolio mainly in mortgages and corporate lending. The bottom line dynamics was also supported by acceleration of net fee income, driven primarily by initiatives in transactional business of corporate clients. All these factors assure our ROE above 20%."
Comments for 10M 2019:
Net interest income exceeded RUB1.0 trn. As compared to 10M 2018, the dynamics was affected by increased cost of client funding at the end of 2018 and early 2019. Growth in volume of mid-term funding and its gradual cost reduction benefit net interest income performance at present and going forward, which is in line with our expectations.
Fee and commission income growth accelerated to 14.5% led by transactional business. Net fee and commission income for 10M 2019 was up by 8.9% to RUB377.0 bn. The dynamics is affected by specifics of accounting for the loyalty program costs given that the Bank started accruing these expenses evenly from the beginning of the year as part of RAS convergence with IFRS. The impact will largely be absorbed by the year end. Similar changes were implemented in recognition of fees to payment systems and their impact will be over in autumn 2020.
Operating expenses increased by 8.8%. As compared to 10M 2018, OpEx dynamics was affected by annual wage increase in July as well as VAT rate increase from January 1, 2019 and transfer of employees from Sberbank Technologies JSC to Sberbank PJSC over the second half of 2018. Cost-to-income ratio for 10M 2019 came at 31.8%.
Total provision charge including the fair value revaluation amounted to RUB14.5 bn in October and RUB103.4 bn year to date, which is half the amount booked for 10M 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. As of November 1, loan-loss provisions were 2.9 times that of the overdue loans.
Net profit before tax grew by 8.6% to RUB919.7 bn as compared to 10M 2018. Net profit increased by 7.9% to RUB739.4 bn.
Total assets were down by 0.7% in October mainly due to the interbank transactions related to a temporal inflow to corporate accounts in September.
The Bank continued lending expansion in October, issuing RUB1.4 trn loans to corporate clients, which was the largest monthly issuance since the beginning of 2018. Year to date, the Bank lent RUB9.2 trn to corporate clients. Corporate loan portfolio up by 1.1% in real terms or RUB136 bn in October.
Loan issuances to retail clients totaled RUB290 bn in October and RUB2.7 trn year to date. Retail loan portfolio expanded by 1.5% in October to RUB7.1 trn.
The share of overdue loans remained virtually unchanged in October at 2.2%.
Securities portfolio increased by 0.3% in October on purchases of CBR bonds along with sovereign Eurobonds and stood at RUB3.23 trn as of November 1.
Deposits and accounts of corporate clients decreased in October by 1.8%. Retail deposits were down by 0.6% as a result of optimization of cost of client funding in all currencies on the back of falling market rates, inflation slowdown and easing policy by the Bank of Russia.
Combined client deposits and accounts increased by 2.3% excluding the impact of FX revaluation for 10M 19.
Core Tier 1 and Tier 1 capital remained unchanged in October. Earnings for the period of April-October 2019 will be accounted for in capital calculation as soon as annual audit is completed.
Total capital was barely changed in October (+0.1%), due to the influence of diverse factors. Recognition of earnings and revaluation of securities due to the key rate decrease by the Bank of Russia were positive. In the meantime, negative impact came from reduced amount of CBR subordinate debt recognized in capital as a new edition of CBR Regulations No646-P became effective.
Risk-weighted assets increased in October by RUB321 bn, due to the loan portfolio expansion.
|
Capital, RUB bn
|
1 Nov'19*
|
1 Oct'19
|
1 Nov'19*/
1 Oct'19
|
1 Jan'19
|
1 Nov'19*/
1 Jan'19
|
|
Core Tier 1 capital N1.1
|
3,344
|
3,344
|
-
|
3,178
|
5.2%
|
|
Tier 1 capital N1.2
|
3,344
|
3,344
|
-
|
3,178
|
5.2%
|
|
Total capital N1.0
|
4,444
|
4,440
|
0.1%
|
4,244
|
4.7%
|
|
Capital adequacy ratios, %
|
|
|
|
|
|
|
Core Tier 1 capital N1.1, min. 4,5%
|
11.17%
|
11.29%
|
-0.12 pp
|
11.11%
|
0.06 pp
|
|
Tier 1 capital N1.2, min. 6,0%
|
11.17%
|
11.29%
|
-0.12 pp
|
11.11%
|
0.06 pp
|
|
Total capital N1.0, min. 8,0%
|
14.81%
|
14.96%
|
-0.15 pp
|
14.84%
|
-0.03 pp
|
|
Risk-weighted assets, RUB bn
|
30,006
|
29,235
|
1.1%
|
28,596
|
4.9%
|
* preliminary calculations
Sberbank Financial Highlights for 10M 2019 (under RAS, non-consolidated)
