Sberbank (SBER)
Sberbank: Sberbank RAS 7M 2020: the Bank earned RUB403.1 bn
07-Aug-2020 / 10:04 MSK
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
*Sberbank releases Financial Highlights for 7 months of 2020 (under RAS;
non-consolidated) *
_The numbers are calculated in accordance with Sberbank's internal
methodology. _
_Please note that some minor changes became effective in Sberbank's internal
methodology starting from January 1, 2020. Therefore, the numbers for 2019
have been recalculated to make them comparable._
August 7, 2020
*Key highlights for July 2020:*
- In July, the Bank earned RUB65.6 bn in net profit, ROE came in at 15.9%
for the month;
- Combined loan portfolio was up by 0.9% in July, excluding the effect of
FX revaluation, with retail portfolio expanding by 1.8%, which was the
most noticeable monthly increase from the beginning of last year, driven
both by mortgages (+2.1%) and consumer lending (+1.8%). The Bank produced
a record loan amount of RUB384 bn to retail clients, which was 1.4 times
the amount of loans produced a year ago;
- Retail client accounts increased by 1.3% and were up 0.4% excluding the
effect of FX revaluation;
- Operating income before provisions grew by 36% yoy, mainly due to net
interest income and net trading income.
Alexandra Buriko, CFO, stated:
"In July, Sberbank had a solid increase in corporate and retail lending as
demand for loans recovered, among other factors, on the back of lower
interest rates and considerable support measures to both community and
business. The volume of restructured loans marginally increased as the
majority of applications were processed in previous months. At the same
time, we are cautious about the quality of the loan portfolio going forward.
Current revenue trends benefit the profitability of the Bank, which along
with cost optimization efforts support growth in returns on capital - ROE
for the month came in as high as 16%."
*Comments for 7M 2020:*
*Net interest income *increased by 12.7% as compared to 7M 2019 and amounted
to RUB809.4 bn. The increase was driven mainly by lower cost of funding and
the effect of reduced allocations for deposit insurance from the beginning
of the year.
*Net fee and commission income* was up by 8.8% to RUB274.2 bn, mainly due to
growing net income from settlement transactions along with client operations
on financial markets and gradual recovery in transaction activity in bank
cards.
*Operating expenses *amounted to RUB337.2 bn for 7M 2020, up by 3.9% yoy. In
July, operating expenses declined by 0.4% yoy as a result of the
pandemic-related efficiency enhancement program and the levelling of the
base effect from payroll indexation in July 2019.
Positive trend for *cost-to-income ratio* remained intact for 7M 2020: 27.1%
vs 31.6% a year ago.
*Total credit risk charge including fair-value revaluation* amounted to
RUB68.7 bn in July. The charge was impacted by a weaker ruble, which led to
incremental provisions of about RUB28 bn on FX loans without quality
deterioration. This was offset by the respective positive revaluation in
trading income and had no impact on the bottom line. For 7M 2020, provisions
totaled RUB409.4 bn vs RUB52.8 bn a year ago, which owed to the COVID-19
related global distress. Loan coverage ratio came at 2.2 times overdue
loans.
*Net profit before income tax *for 7M 2020 came in at RUB498.7 bn.
*Net profit* amounted to RUB403.1 bn. High profit tax in July resulted from
additional taxes accrued for 2Q 2020. Effective tax rate for 7M 2020 was
19.2%.
*Total assets *increased by 1.7% to RUB30.4 trn. The increase was mainly due
to positive FX revaluation. Adjusted for FX revaluation effect, assets were
up by 0.4%.
The Bank issued RUB0.9 trn to *corporate clients* in July and over RUB7.0
trn for 7M 2020, which was 26% higher than a year ago. The Bank remains
actively involved in business support initiatives from the state. Under the
state program '2% Loan' launched in June, the Bank approved loans for RUB207
bn. Corporate loans portfolio amounted to RUB14.4 trn, up by 2.3% for the
month and by 0.4% excluding the effect of FX revaluation. The corporate
exposure that was restructured under own or state programs was scarcely
changed in July.
Loan production to *retail clients* in July hit a record of RUB384 bn, which
was 1.4 times the amount produced last July. Growth was evenly driven by
consumer loans and mortgages. Mortgage issuance hit a monthly record of
RUB190 bn, including both state and Bank's own subsidized mortgage programs.
As a result, retail portfolio expanded by 1.8% or RUB135 bn, the largest
monthly increase since the beginning of 2019. The outstanding balance of
retail loans totaled RUB7.7 trn as of August 1, 2020.
The share of *overdues* in the total loan portfolio came at 3.3% as of end
of July.
The outstanding *securities portfolio* balance increased by 7.0% to RUB3.9
trn in July, mainly due to purchases of the CBR bonds.
*Client funding* increased by 0.7% in July. Retail funding was up by 1.3%,
while corporate finding reduced by 0.4%. Overall, client funding year to
date added 2.3% excluding the effect of FX revaluation and grew by 7.0% in
nominal terms.
*Core Tier 1* and *Tier 1 capital* remained virtually unchanged at RUB3,994
bn. *Total capital* increased in July by RUB18 bn, due to the net profit for
the period. Total capital was negatively impacted by deferred income tax and
reduction in profit recognized in equity due to the adjustments provided by
the Bank of Russia Regulation No. 646-P "On the methodology for determining
shareholder equity (capital) of credit institutions (Basel III)" and net
profit for April.
*The risk-weighted assets* increased by 1.4% or RUB0.4 trn in July, driven
by loan portfolio expansion including the effect from FX revaluation as well
as macro add-ons applicable to newly issued retail loans.
_1 _1__
__Jan' Aug__
_1 __20_ '20*/
Aug'2 _
0*/_ _ 1
_1 _ 1 __Jan
Aug'20 July' '__20
_Capital, RUB bn_ *_ _1 July'20_ 20_ _
Core Tier 1 capital N1.1 3,994 3,993 0.02% 3,300 21.0%
Tier 1 capital N1.2 3,994 3,993 0.02% 3,300 21.0%
Total capital N1.0 4,643 4,625 0.4% 4,568 1.6%
_Capital adequacy ratios, %_
Core Tier 1 capital N1.1, min -0.19 2.94
4.5% 13.45% 13.64% pp 10.51% pp
-0.19 2.94
Tier 1 capital N1.2, min 6.0% 13.45% 13.64% pp 10.51% pp
-0.16 1.09
Total capital N1.0, min 8.0% 15.61% 15.77% pp 14.52% pp
_Risk-weighted assets, RUB bn_ 29,745 29,333 1.4% 31,470 -5.5%
_* preliminary calculations_
Sberbank Financial Highlights for 7M 2020 (under RAS, non-consolidated)
ISIN: US80585Y3080, RU0009029540, RU0009029557, US80585Y4070
Category Code: MSCM
TIDM: SBER
LEI Code: 549300WE6TAF5EEWQS81
Sequence No.: 80545
EQS News ID: 1112615
End of Announcement EQS News Service
(END) Dow Jones Newswires
August 07, 2020 03:04 ET (07:04 GMT)
