OREANDA-NEWS. October 12, 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 9M 2011 (as compared to 9M 2010)

Net interest income grew 12.8% y-o-y

Net fee and commission income rose by 5.5% y-o-y

Operating income before total provisions increased by 14.1% y-o-y

Write-backs of total provisions amounted to RUB3.1 bn vs. provision charge of RUB160.0 bn for the same period a year ago

Operating income after total provisions grew 1.8-fold y-o-y

Operating expenses increased by 24.3% y-o-y

Profit before tax amounted to RUB317.9 bn vs. RUB131.3 bn for 9M 2010

Net profit totaled RUB254.3 bn vs. RUB106.8 bn for 9M 2010 

Operating income before total provisions increased by 14.1% y-o-y for 9M 2011.

Net interest income rose 12.8% y-o-y, which was mainly due to

A 21.0% y-o-y increase in income from retail lending as the portfolio expanded

A 16.2% y-o-y reduction in interest expenses on customer accounts and amounts due to other banks as the cost of funding fell

Net fee and commission income was up by 5.5% y-o-y owing to increased volume of fee-generating operations. Operations with bank cards were the largest contributor, increasing by 1.5-times as a result of growth in the number of cards and volume of related operations as well as increased turnover of acquiring operations.

Net gain from trading on financial markets amounted to RUB25.5 bn for 9M 2011 vs. RUB11.0 bn a year ago. This was the result of gains on conversion operations and transactions with precious metals.

The Bank wrote back RUB3.1 bn of total provisions for 9M 2011 vs. provision charge of RUB160.0 bn for 9M 2010. The m-o-m decrease in the write-back is explained by

Provisioning against other assets, mainly FX derivatives amid increased volatility on the currency market (-RUB8.2 bn);

Losses from assignment sales as a result of planned work with distressed assets (-RUB3.4 bn);

Provisioning for loan impairment related to portfolio expansion and revaluation of currency loans (-RUB2.7 bn).

Operating expenses rose by 24.3% y-o-y, which was mainly due to higher staff costs on the planned increases in salaries starting from early 2010 as well as costs incurred in relation to the Bank’s continuing implementation of its strategy and business development. Furthermore, growth in deposits entailed an increase in mandatory fee payments to the state-deposit insurance system.

Given that growth in operating income outpaced operating expenses in 3Q 2011, cost to income ratio came down from 41.2% to 40.5%.

Profit before tax totaled RUB317.9 bn for 9M 2011 and net profit was RUB254.3 bn. Both figures were 2.4 times higher than for 9M 2010 and made historical record highs.

The Bank’s assets increased by RUB826 bn or 9.7% year-to-date and reached RUB9.4 trln for 9M 2011.

In September assets grew by RUB272 bn or 3.0%, which made a third of the year-to-date growth. This was largely due to a positive revaluation of FX balance sheet items as a result of US dollar appreciation relative to ruble and euro. Nevertheless, the main driver to asset growth remains loan portfolio expansion:

The Bank lent Russian corporate clients over RUB520 bn in September and more than RUB3.5 trln for 9M 2011. As of October 1, 2011, the balance of corporate loan portfolio amounted to RUB5,558 bn, up 16.6% year-to-date.

The Bank issued over RUB110 bn of retail loans in September and about RUB800 bn for 9M 2011. Retail lending was mainly encouraged by promo-actions with customer-attractive terms. The retail loan portfolio increased by 20.5% ytd to RUB1,568 bn as of October 1, 2011.

The quality of the loan portfolio continued to improve: the overdue loans as a percentage of the total book decreased to 4.16% from 5.04% in the beginning of the year and 4.39% as of September 1, 2011. The coverage ratio remained strong with loan-loss provisions at RUB638 bn or 2.15 times the overdue loans as of October 1, 2011.

Investment portfolio contracted by RUB15.9 bn in September to RUB1,475 bn, affected by a negative revaluation of securities as a result of unfavorable market environment in September. There were reductions in portfolios of government and sub-government bonds as well as corporate shares. In the meantime, the corporate bond portfolio expanded by RUB8.5 bn. The share of government bonds remained stable at 53% and that of corporate bonds increased to 32 % in September.

The main sources of funding in September were amounts due to other banks and retail deposits.
Retail accounts and deposits increased by RUB69 bn in September to RUB5,202 bn, a 8.2%- ytd increase.

Corporate accounts and deposits added RUB66 bn in September to RUB1,969 bn led by term deposits. The balance of corporate accounts and deposits increased by 5.5% year-to-date.

Regulatory capital (under CBR regulation No. 215-P) rose by RUB20.6 bn in September to RUB1,465 bn supported by a net profit increase (RUB28.5 bn). There was an offsetting impact attributable to a negative revaluation and contributions to charter capital of the Bank’s subsidiaries. The regulatory capital increased by 18.0% year-to-date.

Capital adequacy ratio stood at 17% as of October 1, 2011.