Sberbank: Sberbank releases Financial Highlights for 4 months of 2020 (under RAS; non-consolidated)

• The Bank granted RUB1 trn in loans, including RUB834 bn to corporate clients and RUB166 bn to retail clients.
• By the end of April, the Bank restructured RUB80 bn of loans to corporate clients and approved over RUB70 bn loan restructuring to retail clients.
• Retail deposits increased by 1.5% (+2.5% excluding negative FX revaluation).

Deputy Chairman of Sberbank Alexander Morozov stated:
"In April, Sberbank launched new support programs for both corporate and retail borrowers. As of now, the overall utilization of these programs under the bank's own and state initiatives has exceeded RUB180 bn. In spite of significant credit risk builds in April to factor in the worsening macro outlook for the Russian economy, Sberbank delivered year to date over 15% return on equity".

 
Comments for 4M 2020:
Net interest income increased by 9.6% as compared to 4M 2019 and amounted to RUB445.5 bn. The increase was driven by lower cost of funding and expansion of the loan portfolio.

Net fee and commission income was up by 8.6% to RUB150.8 bn. Fees income growth was upheld by increased turnover of settlement transactions and client transactions on financial markets. In the meantime, growth from operations with bank cards and acquiring slowed down on the back of subdued client transactional activity in April.  

Operating expenses increased by 3.6% as compared to 4M 2019. The deceleration in cost growth was caused by the launch of cost optimization program to increase business in response to crisis and pandemic spread as well as slowdown in business activity following the introduction of non-working days. Cost-to-income ratio for 4M 2020 came in at 26.3% vs 32.3% a year ago.

Total credit risk charge including fair-value revaluation amounted to RUB63.3 bn in April. For 4M 2020 provisions totaled RUB242.1 bn vs RUB9.9 bn a year ago, which owed to the macro corrections in accordance with IFRS9 to take into account in April financials the deterioration in macro outlook on the back of the global distress from COVID-19. This impact was already factored in the consolidated IFRS financial statements for Sberbank Group in 1Q2020. Loan-loss provisions increased from 2.9 to 3.2 times the overdue loans as of May 1, 2020.
Net profit before income tax was to RUB284.1 bn. Net profit amounted to RUB230.1 bn.
Total assets increased by 0.3% to RUB29.7 trn. Excluding negative FX revaluation, assets were up by 1.7%, mainly due to the corporate loan portfolio growth.
The Bank lent RU834 bn to corporate clients in April and over RUB4 trn year to date, which is was 22% higher than a year ago. Corporate loan portfolio expanded by 1.8% in real terms to over RUB14.3 trn.  
Loan issuance to retail clients in April amounted to RUB166 bn, which was 42% less than on average during 1Q 2020, and was largely the result of the lockdown. Consumer lending contracted the most (-59%), while mortgage origination was marginally affected (-9%). Remote channel for transactions through online-platform DomClick enables to satisfy growing mortgage demand. In addition, Sberbank offered own benefits to the state-supported privileged mortgage program by reducing mortgage rate to 6.1%. Repayments outpaced loan issuances for the first time in 3 years and led to retail portfolio contraction by 0.4% in April.
The share of overdues in the total loan portfolio improved in April from 2.24% to 2.15% as a result of planned measured taken with regards to corporate overdues.
The outstanding securities portfolio balance increased by 1.7 % to RUB3.6 trn in April, mainly due to purchases of OFZs and corporate bonds.
Client funding added 0.8% in April excluding FX revaluation: retail funding increased by 2.5% driven by ruble deposits, whereas corporate accounts were down by 2.4% mainly from decrease on ruble accounts, which was for the cost of funding optimization purpose. 

Core Tier 1 and Tier 1 capital remained virtually unchanged at RUB3,991 bn.
Total capital in April increased by RUB166 bn, including the impact of positive revaluation of securities portfolio in the amount of RUB88 bn, increase 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 contracted in April by RUB 1.9 trn or 6% due to the reduction in average risk-weight applied to corporate lending as a result of the updated edition to the Bank of Russia Regulation No. 483-P "On the methodology for IRB-credit risk assessment". 

 

* preliminary calculations

Sberbank Financial Highlights for 4M 2020 (under RAS, non-consolidated)