Sberbank releases Financial Highlights for 9 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.

October 7, 2020

Key highlights for September 2020:

• The Bank earned RUB79.8 bn in net profit, ROE came in at 19.6% and ROA - at 3.1% annualized for the month;
• Retail loan portfolio has for the first time passed the threshold of RUB8 trn, supported by mortgage production that exceeded a record of RUB260 bn as well as consumer lending;
• Corporate loan portfolio grew by 1.1%, excluding the effect of FX revaluation, thus posting positive dynamics for a third month in a row;   
• Client accounts added 1.5%, excluding the effect of FX revaluation: corporate accounts increased by 3.5% and retail accounts - by 0.5%.

 Alexandra Buriko, CFO, stated:

"In September, the retail loan portfolio continued its solid performance and exceeded RUB8 trn. For 9 months, the retail loan portfolio increased by 11.1%. Corporate lending remained on a positive track and was up by 5.9% year to date, excluding the effect of FX revaluation. Growing consumer activity, cost optimization and the resilient quality of the loan portfolio supported return on equity that for 9 months came in as high as 15.8%."

 Comments for 9M 2020:

 Net interest income increased by 13.6% as compared to 9M 2019 and amounted to RUB1,056 bn. The increase was due to loan expansion, lower cost of funding and reduced allocations for deposit insurance from the beginning of the year.

 Net fee and commission income was up by 9.1% to RUB364.8 bn, due to recovery in transaction activity in bank cards and growth in settlement transactions along with income from client operations on financial markets, bank guaranties and trade financing.

 Operating expenses amounted to RUB437.3 bn for 9M 2020, up by 3.8% yoy. The dynamics in expenses benefits from the pandemic-related efficiency enhancement program and the levelling of the base effect from payroll indexation in July 2019. Cost-to-income ratio improved for 9M 2020: 26.9% vs 31.4% a year ago.

 Total credit risk charge including fair-value revaluation amounted to RUB57.1 bn in September. Over half of the charge is attributable to incremental provisions on FX loans without quality deterioration on the back of a weaker ruble exchange rate. For 9M 2020, provisions totaled RUB500.0 bn vs RUB85.4 bn a year ago, which owed to the COVID-19 related global distress. Loan coverage ratio remained intact at 2.2 times overdue loans.

Net profit before income tax for 9M 2020 came in at RUB691.1 bn, while net profit amounted to RUB559.4 bn.

Total assets increased by 4.1% to RUB32.2 trn, driven mainly by lending growth and increased balance of securities portfolio as well as positive FX revaluation. Adjusted for FX revaluation effect, assets increased by 2.6%.

The Bank issued RUB1.2 trn to corporate clients in September and RUB9.5 trn for 9M 2020, including loans originated under the government support programs, which was 22% more than a year ago. Corporate loan portfolio amounted to RUB15.3 trn, up by 1.1% for the month, excluding the effect of FX revaluation.  

Loan production to retail clients in September amounted to RUB468 bn, which was a record for the Bank. Growth was driven mainly by mortgages, which grew by 3.4% for the month. Retail loan portfolio was up by 2.5% or by RUB197 bn and exceeded RUB8 trn.

The share of overdues in the total loan portfolio decreased from 3.30% to 3.25%, led both by corporate and retail loans.

Securities portfolio increased by 11.9% or by RUB462 bn, due to purchases of OFZs. As of the 1st of October, the outstanding balance of securities portfolio exceeded RUB4.3 trn.

Client funding increased by 1.5% in September, excluding the effect of FX revaluation. Retail funding was up by 0.5%, while corporate finding reduced by 3.5%. Overall, client funding year to date added 5.1% excluding the effect of FX revaluation.

Core Tier 1 remained virtually unchanged at RUB4,010 bn.

Tier 1 capital was up by 4.0% for the month to RUB4,160 bn, given that the previously issued subordinate debt for the amount of RUB150 bn was included in sources of additional capital. Core Tier 1 capital adequacy ratio increased to 13.24%, up by 0.48 pp as compared to the Core Tier 1 CAR.

Total capital increased for the month on the back of earnings and higher Tier 1 capital. The Bank of Russia's subordinate debt for the amount of RUB50 bn was excluded from the calculation. In September, total capital was up by 3.6% to RUB4,871 bn.

The risk-weighted assets increased by 2.2% or RUB0.7 trn in September, driven by loan portfolio expansion and amendments to the Bank of Russia's Regulation No.199-I[1]. In the meantime, cancellation of the macro add-ons for unsecured consumer lending issued before 01.09.2019, led to reduction of the risk-weighted assets almost by RUB230 bn.

* preliminary calculations

 Sberbank Financial Highlights for 9M 2020 (under RAS, non-consolidated) 

[1] Amendments to the Bank of Russia's Regulation No.199-И "On the regulatory requirements and add-ons to the capital adequacy ratios for banks with universal banking licenses", including those related to updated criteria of 'investment class' definition with respect to requirements to subsidiaries.