Sberbank releases Financial Highlights for 8 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.

  September 7, 2020

Key highlights for August 2020:

• In August, the Bank earned RUB76.6 bn in net profit, ROE came in at 18.4% for the month and ROA - at 3.0%;
• Corporate loan portfolio expanded by 2.5% in August, excluding the effect of FX revaluation. Retail loan portfolio was up by 2.4%, which was the most noticeable monthly increase over the past two years, driven equally by mortgages and consumer lending;  
• Total loan production in August was RUB1.6 trn. Loans issued to retail clients exceeded RUB440 bn;
• Client accounts added 1.3% in August, excluding the effect of FX revaluation, while corporate accounts increased by 3.3% excluding the effect of FX revaluation.

Alexandra Buriko, CFO, stated:

"In August, Sberbank had a record loan production since the beginning of the year that totaled RUB1.6 trn, while the loan portfolio expanded by 2.9%. In the meantime, loan issuance to retail clients hit a historical high on the back of recovery in consumer activity, subsidized mortgage programs and favorable market rates. It is worth underlying that quality of the loan portfolio remains rather stable. As a result, the Bank delivered ROE for 8 months above 15%."

Comments for 8M 2020:

Net interest income increased by 13.5% as compared to 8M 2019 and amounted to RUB933.0 bn. The increase owed to lower cost of funding and the effect of reduced allocations for deposit insurance from the beginning of the year as well as lending growth.

Net fee and commission income was up by 9.1% to RUB318.9 bn, due to recovery in transaction activity in bank cards and growth in settlement transactions along with income from client operations on financial markets and bank guarantees.

Operating expenses amounted to RUB386.3 bn for 8M 2020, up by 4.2% yoy. The dynamics in expenses was positively impacted by 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 8M 2020: 27.2% vs 30.8% a year ago.

Total credit risk charge including fair-value revaluation amounted to RUB32.0 bn in August. The decline in ruble exchange rate against major currencies during the month led to additional provisioning on FX-loans that totaled RUB10 bn without quality deterioration. It was offset by a respective positive revaluation in trading income with a neutral impact on the bottom line. For 8M 2020, provisions totaled RUB441.4 bn (half of them was allocated during the period from March to May this year) vs RUB88.7 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 8M 2020 amounted to RUB593.7 bn. Net profit came in at RUB479.7 bn.

Total assets increased by 1.7% to RUB30.9 trn, driven mainly by loan portfolio growth. Positive FX revaluation was also supportive. Otherwise, assets increased by 1.2% adjusted for the FX moves.

The Bank issued RUB1.2 trn to corporate clients in August and RUB8.3 trn for 8M 2020, which was by a quarter higher 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 RUB230 bn.

Corporate loan portfolio amounted to RUB14.9 trn, up by 3.2% for the month or by 2.5% excluding the effect of FX revaluation.  

Loan production to retail clients in August hit a record of RUB441 bn, which was 1.5 times higher the average monthly loan production before the crisis and the pandemic. Growth was equally driven by consumer loans and mortgages. Retail portfolio expanded by 2.4% or RUB182 bn. As of the 1st of September, the outstanding balance of retail loans exceeded RUB7.8 trn.

The share of overdues in the total loan portfolio remained at 3.3%.

Securities portfolio increased by 0.3% in August, mainly due to purchases of OFZs and bonds of the Bank of Russia. As of the 1st of September, the outstanding balance of securities portfolio was RUB3.9 trn.

Client funding increased in August by 1.3%, excluding the effect of FX revaluation: retail funding was up by 0.3%, while corporate finding added 3.3%. Overall, client funding grew by 3.6% year to date, excluding the effect of FX revaluation.

Core Tier 1 and Tier 1 capital increased in August by RUB12 bn to RUB4,003 bn. Total capital increased for the month by RUB59 bn, due to the net profit for the period. Total capital was negatively impacted by securities revaluation 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)".

Risk-weighted assets increased by 2.8% or RUB0.8 trn in August, driven by loan portfolio expansion, macro add-ons applicable to newly issued retail loans and settlements with international payment systems.

* preliminary calculations

Sberbank Financial Highlights for 8M 2020 (under RAS, non-consolidated)