Sberbank

  • WKN: A1JB8N
  • ISIN: US80585Y3080
  • Land: Russland

Nachricht vom 30.04.2019 | 09:32

Sberbank reports 1Q 2019 Net Profit of RUB 226.6 bn under International Financial Reporting Standards (IFRS)

Sberbank (SBER)

30-Apr-2019 / 09:32 CET/CEST
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 reports 1Q 2019 Net Profit of RUB 226.6 bn under International Financial Reporting Standards (IFRS)

Moscow, April 30, 2019 - Sberbank (hereafter "the Group") has released its interim condensed IFRS financial statements (hereafter "the Financial Statements") as at and for the 3 months ended 31 March 2019, with report on review by AO PricewaterhouseCoopers Audit. All information is presented net of Denizbank A.S. operations, unless stated otherwise.


Alexander Morozov, Deputy Chairman of the Executive Board, CFO, commented: «We have reached a Return-on-Equity of 22.9% despite the slowdown in net interest income growth passing through the interest margin floor in the first quarter. We do not see any reason to revise the Group's guidance for 2019»

 

 The 1Q 2019 Financial Highlights:

  • The Group net profiti reached RUB226.6 bn;
  • The Group earnings per ordinary share (EPS)i came at RUB10.55 per share, up by 7.2% compared to 1Q 2018;
  • The Group annualized return on equity (ROE)i reached 22.9%, while the Group annualized return on assets (ROA) reached 3.1%;
  • The Group Cost-to-Income ratio improved to 31.9%;
  • The quality of the Group loan portfolio improved: share of Stage 3 and POCI loans came at 7.9%, showing a decrease of 17 bp compared to 4Q 2018.

Selected Financial Results

RUB bn, unless stated otherwise

1Q 2019

1Q 2018

4Q 2018

1Q 2019/
 1Q 2018,
% change

1Q 2019/
4Q 2018, 
% change

Net interest income

337.5

333.5

354.7

1.2%

(4.8%)

Net fee and commission income

104.5

94.4

122.6

10.7%

(14.8%)

Other non-interest income / (expense)ii

39.8

20.4

15.8

95.1%

151.9%

Operating income before provisions***

481.8

448.3

493.1

7.5%

(2.3%)

Net charge related to change in asset quality: 

(45.5)

(21.2)

(52.9)

114.6%

(14.0%)

     Net credit loss allowance charge for debt financial assets

(17.3)

(20.1)

(35.9)

(13.9%)

(51.8%)

     Negative revaluation of loans at fair value due to change in credit quality

(28.2)

(1.1)

(17.0)

2 463.6%

65.9%

Staff and administrative expenses

(152.3)

(146.0)

(208.6)

4.3%

(27.0%)

Net profit  from continuing operations

226.1

225.1

180.7

0.4%

25.1%

Profit / (Loss) from discontinued operations

0.5

(13.0)

(4.5)

--

--

Net profit

226.6

212.1

176.2

6.8%

28.6%

Earnings per ordinary share  from continuing operations, RUB

10.53

10.45

8.46

0.8%

24.5%

Total comprehensive income  from continuing operations attributable to the shareholders of the Bank

221.2

235.8

179.9

(6.2%)

23.0%

Book value per share *, RUB

179.7

158.5

170.5

13.4%

5.4%

Ratios  based on continuing operations

Return on equityi

22.9%

24.2%

18.8%

--

--

Return on assets

3.1%

3.6%

2.6%

--

--

Net interest margin

4.98%

5.69%

5.42%

--

--

Net interest margin**

5.27%

6.03%

5.62%

--

--

Cost of risk (amortized cost loans)

44 bp

50 bp

69 bp

--

--

Cost of risk (amortized cost and FV loans)

96 bp

50 bp

99 bp

--

--

Cost-to-income ratio***

31.9 %

32.8%

42.5%

--

--

* Total equity attributable to shareholders of the Bank / Total numbers of shares outstanding (ordinary + preferred)

** Net interest margin was recalculated as working assets adjusted for the amount of provisions, created against Stage 3 loans

*** Operating income before provisions for debt financial assets, credit related commitments and revaluation of loans at fair value due to change in credit quality

Selected Balance Sheet Results

RUB bn, unless stated otherwise

31.03.2019

31.12.2018

31.03.2019/ 31.12.2018,

% change

Gross total loans*:

20 823.9

21 082.3

(1.2%)

Corporate loans*

13 838.5

14 331.1

(3.4%)

Retail loans*

6 985.4

6 751.2

3.5%

Securities portfolio

4 058.3

3 749.5

8.2%

Assetsi

31 328.7

31 197.5

0.4%

Total deposits:

21 379.3

20 897.3

2.3%

Retail deposits

13 343.7

13 495.1

(1.1%)

Corporate deposits

8 035.6

7 402.2

8.6%

Ratios

Net Loans / Deposits ratio (LDR)

90.5%

93.7%

--

Stage 3 + POCI loans / total gross loans at amortized cost

7.9%

8.1%

--

Provision coverage of Stage 3 + POCI loans

91.9%

90.4%

--

* Before credit related commitments and combined loans at amortized cost and at fair value

Net interest income was RUB337.5 bn in 1Q 2019, up by 1.2% y/y.

Total interest income was up by 11.4% to RUB580.4 bn in 1Q 2019 on the background of the loan portfolio growth. Total gross loans (at amortized cost and at fair value) increased by 13.8% to RUB20.8 trn. The yield on working assets decreased by 30 basis points y/y.

  • Retail loan portfolio was up by 3.5% to RUB7.0 trn in 1Q 2019, share of which reached 33.5% of the total loan portfolio.
    • Consumer loan portfolio was up by 4.6% in 1Q 2019 on the back of current interest rates environment; share of consumer unsecured loans sold through digital channels comprised 48% as of 1Q 2019.
    • Mortgages grew by 2.3%. The share of mortgages originated via DomClick exceeded 27% in Russia and over 48% in Moscow. The number of listings displayed on DomClick platform reached 1.5 mln.
    • Retail loan yield came down to 12.0% in 1Q 2019 showing a decrease of 50 basis points on the back of gradual redemptions of older vintage loans at higher rates.
  • Corporate loan portfolio (at amortized cost and at fair value combined) came down by 3.4% to RUB13.8 trn in 1Q 2019 mostly influenced by foreign currency revaluation. 
    • Based on management accounts, Ruble loan portfolio increased by 0.5% during the quarter, while FX portfolio, net of currency revaluation, was down by 3.7%.
    • Corporate loan yield was down by 20 basis points to 8.0% in 1Q 2019 as compared to 4Q 2018. The decrease is mainly caused by the utilization of credit lines, opened before interest rates increase. The yield is no longer affected by this factor.

Total interest expense for 1Q 2019 increased by 30.7% to RUB221.7 bn from 1Q 2018 on the back of growth of interest bearing liabilities by 16.3% and cost of funding increase by 40 basis points y/y.

  • Deposit insurance expenses increased by 18.4% y/y to RUB21.2 bn in 1Q 2019. The bank's liabilities subject to DIA contributions were extended by funds from small and medium-sized enterprises, which had an impact on the growth of contributions to the deposit insurance system (+RUB1.9 bn).

Net LDR ratio comprised 90.5% and came down by 3.2% as compared to 4Q 2018. The ratio in Rubles decreased to 99.8%, while in U.S. dollars came at 61.7% and in Euro at 84.7%.

The Group net fee and commission income for 1Q 2019 came at RUB104.5 bn, up by 10.7% y/y supported mainly by bank card operations up by 24.0% and client operations with foreign currencies and precious metals up by 15.1%.

Growth of sales of investment insurance for 1Q 2019 exceeded 11.0% compared to 1Q 2018. Assets under management of the Wealth Management business achieved RUB1.3 trn.

The Group operating expenses (staff and administrative) for 1Q 2019 came at RUB152.3 bn, up by 4.3% as compared to the same period a year ago. The increase was explained by the change in capitalization principles of expensing for in-house developed IT products in light of optimization of operations of the Technology Block. Apart from that it was influenced by Ruble devaluation as compared to 1Q 2018 and VAT rate increase from the beginning of the year. Excluding these factors operating expenses would have decreased by 0.5%.

The Group Cost-to-Income ratio*** improved up to 31.9%.  

Net credit loss allowance charge for loans at amortized costs amounted to RUB 22.1 bn for 1 quarter 2019. This translates into Cost of Risk at 44 bps for this loan book. According to IFRS 9 part of the loan portfolio is accounted at fair value through profit or loss. Negative revaluation of loans at fair value due to change in credit quality amounted to RUB28.2bn in 1Q 2019. Consequently, the combined Cost of Risk for loans at amortized cost and at fair value in 1Q 2019 was 96 basis points.  Starting from 1Q19 we exclude FX-component from provision charge/ recovery for FX-denominated loans at amortized cost as well as from revaluation of FX-denominated loans at fair value. This FX component was shown as foreign exchange translation (losses) / gains and amounted to RUB 31.5 bn for the reporting period.

The total provision coverage of Stage 3 and POCI loans increased in 1Q 2019 compared to the previous quarter and comprised 91.9%. The share of Stage 3 and POCI loans in total gross loans at amortized cost improved by 17 basis points and came to 7.9%. 

 

Capital Adequacyi

Under Basel III

RUB bn, unless stated otherwise 

31.03.2019 (standardized + IRB)

31.12.2018 (standardized + IRB)

31.03.19 (standardized + IRB)/ 31.12.18 (standardized + IRB), % change

Total Tier 1 capital

3 976.3

3 766.5

5.6%

Total capital

4 080.2

3 950.6

3.3%

Risk-weighted assets

31 480.9

31 793.1

(1.0%)

Credit risk

27 108.5

27 477.4

(1.3%)

Operational risk

3 339.9

3 339.9

0.0%

Market risk

1 032.5

975.8

5.8%

Ratios

Common equity Tier 1 capital adequacy ratio

12.63%

11.85%

--

Total capital adequacy ratio

12.96%

12.43%

--

 

The Group's total capital under Basel III reached RUB4.08 trn as of 31/03/2019, up by 3.3% as compared to 31/12/2018, mainly on the back of retained earnings.

The Group's risk-weighted under IRB approach assets were down by 1.0% to RUB31.5 trn during 1Q 2019 due to decrease in credit risk. The Group leverage ratio improved from 11.3% to 11.8% in 1Q 2019.

Common equity Tier 1 capital adequacy ratio improved by 78 basis points and came at 12.63%, while total capital adequacy ratio - by 53 basis points up to 12.96% as of 31/03/2019.

i Including corresponding line from discontinued operations, that, effective May 2018, Denizbank is classified as

ii Other non-interest income / (expense) includes: Net gains from non-derivative financial instruments at fair value through profit or loss excluding revaluation of loans at FV through P&L due to change in credit quality; Net gains from financial instruments at fair value through other comprehensive income ; Impairment of investment securities available-for-sale ; Net gains / (losses) from derivatives, trading in foreign currencies, foreign exchange and precious metals accounts translation; Impairment of non-financial assets; Net gains on initial recognition of financial instruments and on loans restructuring; Net recovery of / (charge for) other provisions ; Revenue of non-banking business activities ; Cost of sales and other expenses of non-banking business activities ; Net premiums from insurance and pension fund operations; Net claims related to insurance and pension fund operations; Income from operating lease of equipment; Expenses related to equipment leased out; Other net operating income

 

 

DISCLAIMER

This document has been prepared by Sberbank of Russia (the "Bank") and has not been independently verified. This press release does not constitute or form part or all of, and should not be construed as, any offer of, or any invitation to sell or issue, or any solicitation of any offer to purchase, subscribe for, underwrite or otherwise acquire, or a recommendation regarding, any shares or other securities representing shares in, or any other securities of the Bank, or any member of the Bank's group, nor shall it or any part of it nor the fact of its presentation or distribution form the basis of, or be relied on in connection with, any contract or any commitment whatsoever or any investment decision. The information in this press release is confidential and is being provided to you solely for your information and may not be reproduced, retransmitted or further distributed to any other person or published, in whole or in part, for any purpose.

This press release doesn't constitute an offer of securities of the Bank for sale in the United States. The Securities may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act of 1993 as amended.

This press release is only being distributed to and is only directed at (A) persons in member states of the European Economic  Area (other than the United Kingdom) who are "qualified investors" within the meaning of Article 2(1)(e) of Directive 2003/71/EC (as amended and together with any applicable implementing measures in that member state, the "Prospectus Directive") ("Qualified Investors"); (B) in the United Kingdom, Qualified Investors who are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") and/or high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order; and (C) such other persons as to whom this press release may be lawfully distributed and directed under applicable laws (all such persons in (A) to (C) above together being referred to as "relevant persons").  The shares, or other securities representing shares, or any other securities of the Bank are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons.  Any person who is not a relevant person should not act or rely on this press release or any of its contents.

This press release does not constitute any offer of, or any invitation to sell or issue, or any solicitation of any offer to purchase, subscribe for, underwrite or otherwise acquire any securities of the Bank within the Russian Federation or in favor of the Russian entities or persons. Any foreign securities representing shares of the Bank may not be offered or sold within the Russian Federation, except as provided by the relevant Russian legislation.

The information in this press release or in oral statements of the management of the Bank may include forward-looking statements. Forward-looking statements include all matters that are not historical facts, statements regarding the Bank's intentions, beliefs or current expectations concerning, among other things, the Bank's results of operations, financial condition, liquidity, prospects, growth, targets, strategies, and the industry in which the Bank operates. By their nature, forward-looking statements involve risks and uncertainties, because they relate to events and depend on circumstances that may or may not occur in the future. The Bank cautions you that forward-looking statements are not guarantees of future performance and that its actual results of operations, financial condition and liquidity and the development of the industry in which the Bank operates may differ materially from those made in or suggested by the forward looking statements contained in this press release or in oral statements of the management of the Bank. In addition, even if the Bank's results of operations, financial condition and liquidity and the development of the industry in which the Bank operates are consistent with forward-looking statements contained in this press release or made in oral statements, those results or developments may not be indicative of results or developments in future periods.

Sberbank assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or for any other reason.

The information and opinions contained in this press release or in oral statements of the management of the Bank are provided as at the date of this press release or as at the other date if indicated and are subject to change without notice.

No reliance may be placed for any purpose whatsoever on the information contained in this press release or oral statements of the management of the Bank or on assumptions made as to its completeness.

No representation or warranty, express or implied, is given by the Bank, its subsidiaries or any of their respective advisers, officers, employees or agents, as to the accuracy of the information or opinions or for any loss howsoever arising, directly or indirectly, from any use of this press release or its contents.

This press release is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.

By attending or reviewing this press release, you acknowledge and agree to be bound by the foregoing.


Attachment

Document title: Sberbank Financial Statements 1Q2019 IFRS
Document: http://n.eqs.com/c/fncls.ssp?u=JSKKOUTUEL



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