Sberbank (SBER)
Sberbank: RAS 7M 2019 - The Bank earned RUB75.5 bn in July. Return on Equity (ROE) came
at 22.2% for 7M 2019
07-Aug-2019 / 09:09 CET/CEST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
*Sberbank releases Financial Highlights for 7M 2019 (under RAS; non-consolidated) *
_Please note that the numbers are calculated in accordance with Sberbank's internal
methodology. _
_Also note that some changes became effective in the Russian accounting standards in
2019 as part of convergence with IFRS, including transition to IFRS 9._
August 07, 2019
*Key highlights for July 2019:*
- The Bank earned RUB75.5 bn in July. Return on Equity (ROE) came at 22.2% for 7M
2019.
- The Bank issued RUB275 bn loans to retail clients. Retail loan portfolio increased
by 1.4%.
- Corporate loan portfolio denominated in rubles expanded by RUB31 bn for the month.
Deputy Chairman of Sberbank Alexander Morozov stated:
"Sberbank had a solid growth of retail loan portfolio in July and substantially
increased lending to corporate clients. As a result our ruble-denominated loan portfolio
expanded by over RUB125 bn. Loan growth coupled with a gradual decrease in cost of
funding led to an ROE above 22%, which is in line with our expectations."
*Comments for 7M 2019:*
*Net interest income* totaled RUB718.2 bn. As compared to 7M 2018, the dynamics was
affected by rising cost of client funding as well as payment of dividends which led to
lower yield on money-market operations in July.
*Fee and commission income* grew by 12.0% driven by transactional business. *Net fee and
commission income* was up by 3.9% to RUB252.5 bn. The slowdown reflected a high-base
effect in July 2018 due to the income received from international payment systems as
well as specifics of accounting for loyalty program costs. As part of convergence with
IFRS, the Bank started accruing these income and expense items evenly from the beginning
of this year. Therefore, the effect will largely be absorbed by the yearend. Excluding
these factors, net fee and commission income growth for 7M 2019 would be 7.7%.
*Operating expenses *increased by 9.1%. OpEx dynamics was affected by annual wage
increase effective in July as well as VAT rate increase from January 1, 2019 and staff
reshuffling from Sberbank Technologies JSC to Sberbank PJSC over the second half of
2018. *Cost-to-income ratio* came at 31.5%.
*Provision charges* amounted to RUB26.6 bn in July and RUB57.5 bn year to date, which is
three times less than for the similar period a year ago. This is caused by the opposite
direction in FX rate dynamics for comparable periods as well as restructuring of the
Agrokor debt completed in June 2019. As of August 1, loan-loss provisions were 2.8 times
that of the overdue loans. Positive revaluation of loans at fair value amounted to
RUB1.0 bn for 7M 2019.
*Net profit before tax *grew by 11.8% to RUB649.8 bn for 7M 2019. *Net profit *increased
by 10.8% to RUB519.7 bn.
*Total assets* increased by 0.6% in July to RUB27.7 trn.
The Bank lent RUB780 bn to *corporate clients* for the month and RUB5.6 trn year to
date. Corporate loan portfolio denominated in rubles increased by RUB31 bn in July,
mainly led by loans to small and medium-size enterprises.
The Bank issued RUB275 bn loans to *retail clients* in July and over RUB1.8 trn for 7M
2019. Retail lending increased by 1.4% for the month to RUB6.76 trn, which corresponds
to 34.7% of the total loan look.
The share of *overdue loans* in the total portfolio amounts to 2.27%.
*Securities portfolio* grew in July by 2.9% to more than RUB3.5 trn, largely due to
purchases of OFZ bonds.
*Deposits and accounts of corporate and retail clients *decreased in July by 0.4% to
RUB13.1 trn and RUB7.0 trn July, respectively. *Combined client funding* increased in
real terms by 2.7% year to date.
The Bank issued three series of *exchange-traded bonds* with 2 and 3 year-maturities for
the amount of RUB45 bn.
Closing of Denizbank sale transaction had a significant impact on capital of Sberbank
PJSC in July. *Core Tier 1* and *Tier 1 capital adequacy ratios* increased by 30 bps,
due to the reduction of equity investments in the Bank's financial subsidiaries. Total
capital adequacy was up by 66 bp, on the back of incremental reduction of exclusions
from capital related to subordinated loans. The fully-fledged effect from the deal
closing will be reflected on the Group level and will amount to 120 bp of the core
capital adequacy ratio.
*Risk-weighted assets* barely decreased in July as lending growth and securities
portfolio expansion was offset by reduced investments into subsidiaries further to the
Denizbank sale.
_Capital__,_ _RUB bn_ _1 _1 __July__'1__9_ _1 __Aug'19*/ _ _1 _1
__Aug _1 July'19 _ Jan'19 __Aug
__'1__ _ '19*/ _
9*_ _1
Jan'19_
Core Tier 1 capital N1.1 3,360 3,302 1.75% 3,178 5.74%
Tier 1 capital N1.2 3,360 3,302 1.75% 3,178 5.74%
Total capital N1.0 4,338 4,119 5.32% 4,244 2.23%
_Capital adequacy ratios__, %_
Core Tier 1 capital N1.1, min. 11.60% 11.42% 0.18 pp 11.11% 0.48 pp
4,5%
Tier 1 capital N1.2, min. 6,0% 11.60% 11.42% 0.18 pp 11.11% 0.48 pp
Total capital N1.0, min. 8,0% 14.97% 14.24% 0.73 pp 14.84% 0.13 pp
_Risk-weighted assets__, RUB bn_ 28,980 28,926 0.19% 28,596 1.34%
* _preliminary calculations_
ISIN: US80585Y3080, RU0009029540, RU0009029557, US80585Y4070
Category Code: MSCM
TIDM: SBER
LEI Code: 549300WE6TAF5EEWQS81
Sequence No.: 15965
EQS News ID: 853277
End of Announcement EQS News Service
(END) Dow Jones Newswires
August 07, 2019 03:09 ET (07:09 GMT)
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