Sberbank in 2014 cuts IFRS net profit by 19.8% to 290.3 bln rubles
MOSCOW. March 27 (Interfax) - Sberbank in 2014 reduced its net profit to International Financial Reporting Standards (IFRS) by 19.8% to 290.3 billion rubles, the bank said in a report.
In Q4 the bank posted 49 billion rubles of IFRS net profit against profit of 93.7 billion rubles in October-December 2013.
Analysts questioned by Interfax expected that the bank would have 31.8 billion rubles of net profit in Q4 and for the year - 273.1 billion rubles.
"The decline in net profit was mainly driven by increase in provision charge for loan impairment," Sberbank said in a press release.
Net provision charge for loan impairment for 2014 amounted to 357 billion rubles, translating to cost of risk of 233 basis points.
"Net interest income for 2014 totaled 1.019 billion rubles, a 18.3% increase year-on-year. The increase is driven by growth of interest earning assets, primarily loans. Net interest income remains the main component of the Group's operating income accounting for 78.4% of total operating income before provision charge for impairment of debt financial assets. Net interest margin declined by 20 basis points to 5.4% in 4Q 2014 primarily following the funding cost increase," the press release says.
The Group's net fee and commission income for 2014 totaled 282.3 billion rubles, a 27.6% increase year-on-year. Income from cash and settlements transactions with individuals and legal entities was the key driver of the growth, Sberbank said.
"Other operating income / (expense) for 2014, which includes net results from operations with securities, foreign exchange, derivatives and precious metals and other items, totaled 1.3 billion rubles versus 11.3 billion rubles for 2013. The decrease is mainly driven by creation of other provisions (under guarantees and other assets) and net losses from operations with securities, partly offset by income from other derivatives," the press release says.
In addition, total operating income before provision charge for impairment of debt financial instruments for 2014 reached 1.307 billion rubles compared to 1.095 for 2013, an 18.8% increase year-on-year. The growth was driven primarily by the growth of net interest income and net fee and commission income.
"The Group's operating expenses for 2014 increased by 12.1% year-on-year to 565.1 billion rubles. The main driver of this growth is an increase in staff costs as a result of business growth. Since operating income growth outpaced the growth of operating expenses, the Group's cost to income ratio for 2014 improved to 43.4% versus 46.1% for 2013," Sberbank added.
"Return on equity remains high at 14.8% versus 20.8% for 2013," Sberbank said.
As of December 31, 2014, the group's total assets reached 25.201 trillion rubles, a 38.4% growth compared to the end of 2013. The main driver of the growth was an increase in loans to customers. Additionally, for 2014, net loans and advances to customers increased by 37.3% to 17.757 trillion rubles compared to 12.934 trillion rubles at 2013 year end.
"In 2014, the proportion of non-performing loans in Group's total gross loans increased to 3.2% as of 31 December 2014 (December 31, 2013: 2.9%)," the press release says.
"Customer deposits increased by 29.0% to 15.563 trillion rubles compared to 12.064 trillion rubles at the 2013 year end, with corporate deposits being the driver of the growth," Sberbank noted.
"The Group's equity increased for 2014 by 7.4% to 2.02 trillion rubles, with net profit being the major driver partly offset with negative revaluation of investment securities available-for-sale," the press release says. In addition, the total capital adequacy ratio (Basel 1) decreased by 130 basis points for 2014 to 12.1%, while the core capital adequacy ratio decreased by 200 basis points to 8.6%.
