Sberbank releases 11M 2009 Financial Highlights (under RAS)
Please note that the numbers are calculated in accordance with Sberbank’s internal methodology approved in March 2009 as a part of internal accounting optimization and convergence with IFRS. Also note that the numbers as of 1 January 2009 include the effect of subsequent events.
December 22nd, 2009
Income Statement Highlights for 11 months 2009 (as compared to 11 months 2008)
- Operating income before provisions grew by 24.7% y-o-y
- Net interest income increased by 36.1% y-o-y
- Net fee and commission income rose by 8.6% y-o-y
- Operating expenses decreased by 3.5% y-o-y
- Provision charge increased 3.3-fold y-o-y
- Profit before tax amounted to RUB24.3 bn vs. RUB146.0 bn for 11 months of 2008
- Net profit totaled RUB18.5 bn vs. RUB113.2 bn for 11 months of 2008
The Bank’s assets increased by 1.3% ytd to RUB6,806 bn. Growth of corporate loans and investment in securities was offset by provision accumulation.
Sberbank extended lending to the ‘real economy’ – providing Russian companies with RUB3.6 trln in loans over the past 11 months, including about RUB260 bn in November. The corporate loan book expanded by 8.6% ytd to RUB4,324 bn (starting from August 1st, 2009, Sberbank records assignment agreements with deferred payments (hereinafter referred to as “assignments’’) as a part of its corporate loan portfolio according to the Bank’s internal accounting methodology). Restructured loans, which are loan agreements with initial loan terms revised in borrower’s favor, comprised 15.5% of the Bank’s corporate loan portfolio.
To encourage lending activity, the Bank has been lowering rates on loans in all currencies since 2Q09. However, credit demand remains weak on the back of subdued business activity which affects loan portfolio growth. Besides the Bank has been facing significant loan prepayments given that Russian blue-chip companies regained access to foreign capital markets. However, comparable data on the Russian banking sector for 10M 2009 suggest that Sberbank outpaced the sector in terms of corporate loan intake (7.4% vs. 1.0%), which increased its share in aggregate corporate loans from 30.5% to 32.5%.
Given sluggish consumer demand for loans on the back of falling disposable income, the Bank’s retail loan portfolio shrank by 7.1% ytd to RUB1,168 bn. To expand consumer credit, the Bank has been reversing the restrictions introduced in response to the crisis in the fall of 2008, including lending in foreign currencies, lowering initial payments on mortgages and car loans, extending credit limits and tenures on some loans, etc. As a result, signs of improvement emerged in the retail segment, with portfolio q-o-q contraction slowing from 3.8% and 2.9% in 1Q09 and 2Q09, respectively, to 0.3% in 3Q09, and to 0.2% in October-November. The Bank plans to render consumer loans more affordable by easing credit requirements and new product offerings, thus pursuing a stable retail lending growth.
Prudent credit risk management enables the Bank to sustain high quality of its loan portfolio. As of December 1st, 2009, overdue loans represented 4.5% of the Bank’s loan portfolio (both including and excluding assignments) and were more than twice covered by reserves.
The Bank’s securities portfolio grew 1.9 times ytd to RUB915 bn, mainly led by corporate bonds which increased 3.6 times ytd to RUB301 bn. The Bank opted to buy bonds of Russian blue-chip companies in different sectors as an alternative to conventional lending to the national economy. The Bank also purchased OBR and OFZ bonds in November, which led to a 1.5-fold ytd increase in state bonds to RUB472 bn. The share of corporate bonds rose from 17% at the start of the year to 33%, and the share of government and sub-federal bonds decreased from 80% to 64%.
For 11M 2009, retail deposits increased by RUB420 bn, thus fully offsetting the corporate funds outflow in the amount of RUB155 bn. With a sustainable inflow of retail deposits, the Bank remains highly liquid.
Sberbank’s regulatory capital (under CBR regulation No. 215-P) amounted to RUB 1,340 bn as of December 1st, 2009, unchanged m-o-m and up 15.9% ytd. The capital adequacy ratio stood at 23% as of December 1st, 2009.
Sberbank’s Financial Highlights for 11M 2009 (in accordance with Russian accounting standards; non-consolidated)