7 Mar 2019 12:57

Sberbank boosted net profit under RAS 9.9% to 70.1 bln rubles in Feb

MOSCOW. March 7 (Interfax) - Sberbank of Russia boosted its net profit under Russian Accounting Standards (RAS) 9.9% in February to 70.1 billion rubles, from 68.3 billion rubles in the same month last year, the bank said in a press release.

"February performance was in line with our expectations. The inflow to client deposits in the amount of 250 billion rubles fully offset the January outflow and supported business expansion. Net fee and commission income saw momentum ongoing in February and covered almost 80% of operating expenses. Cost to income remained on the decline, [to] below 29%," said Deputy Chairman Alexander Morozov.

Net profit before income tax grew 7% to 174.1 billion rubles, while net profit increased 11.4% to 143.8 billion rubles, the press release says.

The bank lent over 1.1 trillion rubles to corporate clients. The corporate loan portfolio remained unchanged month-on-month, contracting marginally to 13.2 trillion due to repayments of forex-denominated loans, while the ruble-denominated portfolio remained unchanged.

The bank lent 230 billion rubles to retail clients. The retail loan portfolio increased 1.2% to over 6.3 trillion rubles.

Overdue loans increased 16.8 billion rubles, mainly led by the corporate segment. The share of overdue loans in the total loan portfolio was 2.6%, lower than the banking sector's average of 9.0% excluding Sberbank as of February 1, 2019.

The securities portfolio grew 7.4% to 3.0 trillion rubles, largely due to purchases of Central Bank bonds.

Retail deposits and accounts increased 1.5% in February. Retail deposits grew 2%, offsetting the outflow in January in real terms. Corporate accounts were up 0.5%.

Net interest income remained unchanged year-on-year. Interest income grew 11% on the back of business expansion. Interest expenses increased due to higher market costs and volumes of funding.

Net fee and commission income rose 14.1%. The largest contributors to fee income growth were operations with bank cards, settlement transactions, and bank guarantees. In 2019, the bank made changes to smoothen accounting for bank card annual service fees.

Operating expenses increased 6.4%, with cost-to-income ratio improving from 29.1% to 28.9%. The bank expects these dynamics in H1 to continue to be affected by the staff reshuffling from Sberbank Technologies JSC to Sberbank PJSC that took place in the second half of 2018, as well as the VAT rate increase.

Provision charges totaled 16.3 billion in February and 24.0 billion for 2M 2019. As of March 1, loan-loss provisions were 2.5 times the amount of overdue loans.

Total assets increased 1.5% in February to 27.2 trillion rubles.

Core Tier 1 and Tier 1 capital were unchanged in February, totaling 3.1 trillion rubles. Net profit for the second half of 2018 is not yet included in capital calculation, as it remains unaudited.

Total capital grew 35 billion rubles to over 4.2 billion rubles in February, mainly as a function of earned net profit for the period and repayment of $1 billion in subordinated debt.