OREANDA-NEWS. May 19, 2011. Please note that the numbers are calculated in accordance with Sberbank’s internal methodology, reported the press-centre of Sberbank.

Income Statement Highlights for 4 months of 2011 (as compared to 4 months of 2010)

Net interest income increased by 0.8% y-o-y

Net fee and commission income rose by 3.9% y-o-y

Operating income before total provisions increased by 5.8% y-o-y

Write-back of total provisions amounted to RUB14.6 bn vs. provision charge of RUB62.1 bn for the same period a year ago

Operating income after total provisions grew 1.6-fold y-o-y

Operating expenses increased by 30.8% y-o-y

Profit before tax amounted to RUB137.6 bn vs. RUB69.9 bn for 4 months of 2010

Net profit totaled RUB111.2 bn vs. RUB47.4 bn for 4 months of 2010 

Operating income before total provisions increased 5.8% y-o-y for 4 months of 2011.

Net interest income increased by 0.8% y-o-y on higher income from retail lending expansion and reduced interest expense, the latter due to lower funding costs on corporate accounts and amounts due to other banks.

Net fee and commission income increased by 3.9%, primarily from growth in the number of issued banking cards and agent fees from stronger sales of insurance contracts.

Net gain from trading on financial markets amounted to RUB1.9 bn for 4 months of 2011, which favorably compares to net loss of RUB7.0 bn for the same period a year ago. This was the result of income growth from investment in securities and precious metals and reduced costs from conversion operations. The dynamics of trading income is influenced by specifics of Russian accounting for derivatives.

The Bank wrote back RUB14.6 bn of total provisions for 4 months of 2011 vs. a provision charge of RUB62.1 bn a year ago (Note: “total provisions” line was introduced by the Bank’s internal accounting methodology starting from 1 January 2011). The provision release was triggered by restructuring of several big-ticket loans as part of planned work with distressed assets. Furthermore, there was a pronounced reduction in losses from assignment sales: RUB4.7 bn for 4 months of 2011 vs. RUB47.0 bn for the same period a year ago.

Operating income after total provisions grew 1.6 times y-o-y. Operating expenses rose by 30.8% y-o-y, which was mainly due to higher staff costs as the planned salary adjustments continue and an increase in general and administrative expenses related to business expansion. Cost to income ratio printed at 41.3%.

Profit before tax totaled RUB137.6 bn and net profit came in at RUB111.2 bn. Both figures made historical record highs for the first four months of a year.

The Bank’s assets increased by RUB96 bn to RUB8,643 bn for four months of 2011. The balance sheet was significantly affected by negative foreign currency revaluation as a result of ruble strengthening relative to US dollar.

In April assets grew by RUB74 bn led by loan portfolio expansion. Corporate loan book added RUB67 bn in April to RUB4,935 bn. The Bank lent Russian companies more than RUB400 bn in April and over RUB1.4 trln in loans year-to-date.

Retail loan portfolio in April expanded by RUB33 bn to RUB1,369 bn, with more than RUB90 bn loans issued in April, and about RUB300 bn year-to-date.

The quality of the loan portfolio continued to improve: the overdue loans as a percentage of the total book decreased from 5.04% in the beginning of the year to 4.77%.  The Bank retains adequate coverage ratio. As of 1 May 2011, loan-loss provisions amounted to RUB642 bn, which exceeds overdue loans 2.1 times.

Investment portfolio contracted by RUB51 bn in April to RUB1,701 bn, as the Bank sold some of its CBR bond holdings. As a result, government bonds account for 63% and corporate bonds - for 24% of the portfolio.

The retail deposits balance continued to increase: the inflows in April amounted to RUB100 bn reaching RUB4,942 bn, which fully offset the RUB63 bn outflow from corporate accounts and deposits. Corporate accounts proved to be volatile with outstanding balance prone to significant changes dictated by cash management policies of corporate clients.

Regulatory capital (under CBR regulation No. 215-P) rose by RUB28 bn in April to RUB1,356 bn, due to retained earnings increase. Regulatory capital increased by 9.2% year-to-date.

Capital adequacy ratio remained at 18% as of 1 May 2011.