31 Jul 2019 15:51

Sberbank boosts net profit 16.3% in Q2 2019, to 250.3 bln rubles

MOSCOW. July 31 (Interfax) - Sberbank boosted its net profit to International Financial Reporting Standards (IFRS) 16.3% in Q2 2019 to 250.3 billion rubles, the lender said in its financial report.

In H1, the bank saw IFRS net profit of 476.9 billion rubles, up 11.6% year-on-year.

Analysts surveyed by Interfax expected the bank to post 231.5 billion rubles in net profit in Q2 and 458.1 billion rubles in H1.

"The Group annualized return on equity (ROE) reached 24.9%, while the Group annualized return on assets (ROA) reached 3.4%," the report reads.

Net interest income came at RUB353.1 bn in 2Q 2019, up by 1.2% y/y. Total interest income amounted to RUB605.5 bn, up by 13.1% in 2Q 2019 on the background of the loan portfolio growth (at amortized cost and at fair value) by 5.9% to RUB20.6 trn," it reads.

"The Group net fee and commission income for 2Q 2019 came at RUB116.7 bn, up by 4.2% y/y mainly driven by bank card fees from acquiring, commissions of payment systems and other similar commissions, settlement transactions and brokerage business," the report reads.

"The slowdown in net fee and commission income growth in the reporting quarter was explained by a one-off effect on the income from documentary operations that elevated a comparative base of 2Q 2018. Excluding this factor, the growth for the 2Q 2019 would have comprised 8.1%. From 1 January 2019 VAT from loyalty programs is included in net fee and commission income, the comparative base is adjusted as well," it reads.

"The Group operating expenses (staff and administrative) for 2Q 2019 came at RUB168.5 bn, up by 11.1% as compared to the same period a year ago and up by 7.7% for 6M 2019 y/y. The increase was explained by the change in capitalization principles of expensing for in-house developed IT products in light of optimization of operations of the Technology Block that took place in July, 2018. Apart from that it was influenced by VAT rate increase from the beginning of the year. Excluding these factors, operating expenses growth would not exceed 4.5% for 6M 2019," the report reads.

"Net credit loss allowance charge for loans at amortized costs amounted to RUB7.7 bn for 2 quarter 2019. The charge includes recovery of previously created provisions against Agrokor's exposure due to completion of restructuring. This translates into Cost of Risk at 15 bp for the loan book at amortized cost. According to IFRS 9 a part of the loan portfolio is accounted at fair value through profit or loss. Positive revaluation of loans at fair value due to change in credit quality amounted to RUB0.4 bn in 2Q 2019. Consequently, the combined Cost of Risk for loans at amortized cost and at fair value in 2Q 2019 was 14 bp. Starting from 1Q19 we exclude FX-component from provision charge/ recovery for FX-denominated loans at amortized cost as well as from revaluation of FX-denominated loans at fair value. This FX component was shown as foreign exchange translation (losses) / gains and amounted to RUB7.3 bn for 2Q 2019," it reads.

"[The] retail loan portfolio was up by 4.2% in 2Q 2019 to more than RUB7 trn reaching more than 35% of the total loan portfolio. Client deposits increased by 2.0% for the quarter exceeding RUB21 trn," while the corporate loan portfolio fell 3.6% to 13.34 trillion rubles, "mostly influenced by lower demand for lending in the segment of large borrowers. However, there is an accelerated growth in the small and medium business lending (more than 5% for the quarter). Online lending for individual entrepreneurs was launched in the 2Q 2019," the report reads.

Client deposits increased 2% to over 21 trillion rubles, with retail deposits up 2.5% to 13.67 trillion tubles and corporate deposits up 1.2% to 8.135 trillion. "The share of Stage 3 and POCI loans in total gross loans at amortized cost improved by 0.1 pp [QoQ] and came in at 7.8%," it reads.

"The Group's total capital under Basel III came at RUB4.0 trn as of 30 June 2019, down by 1.8% as compared to 31 March 2019, mainly on the back of dividends distribution in the 2Q 2019," while asset grew 0.7% to 31.7 trillion rubles.

"Common equity Tier 1 capital adequacy ratio decreased by 34 bp and came at 12.29%, total capital adequacy ratio went down by 32 bp to 12.64% as of 30 June 2019," the report reads.