Sberbank releases 8M 2011 Financial Highlights (under RAS; non-consolidated)
Income Statement Highlights for 8M 2011 (as compared to 8M 2010)
- Net interest income grew 11.3% y-o-y
- Net fee and commission income rose by 4.9% y-o-y
- Operating income before total provisions increased by 11.1% y-o-y
- Write-backs of total provisions amounted to RUB17.4 bn vs. provision charge of RUB144.1 bn for the same period a year ago
- Operating income after total provisions grew 1.8-fold y-o-y
- Operating expenses increased by 23.9% y-o-y
- Profit before tax amounted to RUB282.1 bn vs. RUB111.6 bn for 8M 2010
- Net profit totaled RUB225.8 bn vs. RUB88.5 bn for 8M 2010
Operating income before total provisions increased by 11.1% y-o-y for 8M 2011.
Net interest income rose 11.3% y-o-y, which was mainly due to an increase in income from retail lending on portfolio expansion and reduced interest expenses on customer accounts and amounts due to other banks.
Net fee and commission income increased by 4.9% y-o-y, owing to increasing volumes of fee-generating banking services.
Net gain from trading on financial markets amounted to RUB12.1 bn for 8M 2011 vs. RUB6.0 bn a year ago. This was the result of income growth from conversion operations and transactions with precious metals.
Total provisions in August amounted to RUB8.8 bn on the back of an increase in working assets. However, Bank wrote back RUB17.4 bn of total provisions for 8M 2011 which was the result of a planned work with distressed assets. Write-backs of provisions on loans and other assets amounted to RUB26.8 bn vs. a provision charge of RUB90.5 bn for 8M 2010. Losses from assignment sales decreased significantly to RUB9.4 bn for 8M 2011 from RUB53.6 bn for the same period a year ago.
Operating expenses rose by 23.9% y-o-y, which was mainly due to higher staff costs on the planned salary adjustments which commenced in early 2010 and an increase in general and administrative expenses related to business expansion and implementation of strategic projects.
Profit before tax totaled RUB282.1 bn for 8M 2011, which was 2.5 times that of a year ago. Net profit came in at RUB225.8 bn, which is 2.6 times higher than for 8M 2010. Both figures made historical record highs.
The Bank’s assets increased by RUB552 bn or 6.5% year-to-date and reached RUB9.1 trln for 8M 2011.
In August assets grew by RUB68 bn or 0.8% led by loan portfolio expansion:
- The Bank lent Russian corporate clients over RUB400 bn in August and about RUB3 trln for 8M 2011. As of September 1, 2011, the balance of corporate loan portfolio amounted to RUB5,354 bn, up 12.3% ytd.
- The Bank issued about RUB100 bn of retail loans in August and over RUB680 bn for 8M 2011. Retail lending was mainly encouraged by promo-actions with customer-attractive terms. The retail loan portfolio increased by 16.7% ytd to RUB1,519 bn as of September 1, 2011.
The quality of the loan portfolio continued to improve: the overdue loans as a percentage of the total book decreased to 4.39% from 5.04% in the beginning of the year and 4.51% as of August 1, 2011. The Bank retains adequate coverage ratio. As of September 1, 2011, loan-loss provisions amounted to RUB636 bn, which exceeds overdue loans 2.1 times.
Investment portfolio contracted by RUB7.3 bn in August to RUB1,491 bn led by redemptions of CBR bonds in mid-August and negative revaluation of securities reflecting the unfavorable market environment in August. The share of government bonds remained stable at 53% and corporate bonds accounted for 31 % of the portfolio in August.
The main sources of funding in August were amounts due to other banks, including funds allocated to CBR deposits, and retail deposits.
- Retail accounts and deposits increased by RUB39 bn in August to RUB5,133 bn, a 6.7% increase ytd.
- Corporate accounts and deposits decreased marginally in August to RUB1,904 bn. In the meantime, current accounts increased in August. The balance of corporate current accounts and deposits increased by 2.0% ytd.
Regulatory capital (under CBR regulation No. 215-P) rose by RUB24 bn in August to RUB1,444 bn. The regulatory capital increased by 16.3% ytd due to net profit earned this year.
Capital adequacy ratio stood at 17% as of September 1, 2011.