DGAP-News: Sberbank of Russia

DGAP-News: Sberbank: Sberbank releases Financial Highlights for 2015 excluding the effect of subsequent events (under RAS; non-consolidated)

Sberbank / Key word(s): Monthly Figures/Monthly Figures

15.01.2016 09:40

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Sberbank releases Financial Highlights for 2015 excluding the effect of subsequent events (under RAS; non-consolidated)

Please note that the numbers are calculated in accordance with Sberbank's internal methodology. Also note that the effect of subsequent events is included in the numbers as of January 1, 2015 but excluded from the numbers as of January 1, 2016.

January 15, 2016

Key highlights for December, 2015:

- The inflow of customer funds for the month demonstrated a historic high of RUB1.4 trln:

- retail deposits growth exceeded 9% to amount RUB10.9 trln.

- corporate deposits growth exceeded 7% to amount RUB6.7 trln.

- Funds of the CBR and the Federal Treasury were reduced by RUB0.5 trln.

- Net profit in December exceeded RUB33.8 bn.

Deputy Chairman of Sberbank Alexander Morozov stated:

The Bank earned RUB236.3 bn in net profit excluding the effect of subsequent events while operating in difficult conditions in 2015, which accounted for 76% of the 2014 net profit. By the end of the year Sberbank managed to reduce the gap with the 2014 results thanks to sustainable implementation of the cost optimization program, as well as repayment of the state funding in the amount of RUB3 trln.

Analysis of the Statement of Financial Position and Statement of Profit or Loss for 2015, as compared to 2014:

- Interest income increased by 21.3% y-o-y, interest expenses increased by 59.5% y-o-y. Net interest income decreased by 11.1% y-o-y

- Noncredit commission income grew by 17.0% y-o-y, net fee and commission income increased by 4.4% y-o-y

- Operating income before total provisions decreased by 9.2% y-o-y

- Total provision charge was RUB397.6 bn vs. RUB397.9 bn charge for 2014

- Operating expenses decreased by 1.0% y-o-y

- Net profit before income tax reached RUB283.9 bn vs. RUB394.6 bn for 2014

- Net profit totaled RUB236.3 bn (excluding the effect of subsequent events) vs. RUB311.2 bn (including subsequent events)

Comments:

Net interest income came at RUB763.2 bn. The lag in the pace of net interest income growth in 2015 relative to 2014 is contracting: 27.9% (for 3M 2015) vs. 11.1% (for 12M 2015).

- Interest income increased by 21.3%, driven by clients' loan portfolio growth as well as improving yields on corporate portfolio.

- Interest expenses increased by 59.5%, due to the increase in market interest rates and inflow of funds. Interest expenses growth continues to subside as a result of the gradual decrease in the CBR's key interest rate and as well as Sberbank's reduction of state funding.

Net fee and commission income was up by 4.4%. The Bank continued to demonstrate growth of net fees and commission income despite the decline in commission income from corporate lending and banking insurance. Noncredit commission income growth in the year end came at 17.0%, driven mostly by transactional business with bank cards.

Net income from FX revaluation and trading operations on capital markets amounted to RUB68.6 bn for 2015 compared to RUB81.1 bn for 2014.

Operating expenses decreased by 1.0% y-o-y for 2015 due to the Bank's cost optimization program. Administrative costs were reduced by 4.7% for the year.

Total provision charges amounted to RUB397.6 bn for 2015 similar to the amount in 2014. In December amount of provision charge came at RUB27.4 bn mostly driven by ruble devaluation relative to FX that required to form additional reserves for FX loans. The Bank continues to form loan-loss provisions in-line with the requirements of the Central Bank of Russia. Loan-loss provisions are 1.9 times the overdue loans.

Net profit before income tax came at RUB283.9 bn for 2015 vs. RUB394.6 bn in 2014. Net profit totaled RUB236.3 bn (excluding the effect of subsequent events) vs. RUB311.2 bn (including subsequent events).

Assets increased by RUB1.3 trln in December to exceed RUB23 trln. A significant portion of the December growth was attributed to the revaluation of the Balance Sheet items. Assets increased by 5.6% over the year.

The Bank lent more than RUB1.2 trln to corporate clients in December, or RUB6.8 trln during the year. The loan portfolio ending balance increased by RUB417 bln, or by 3.5%, in December, mostly driven by the revaluation. Total corporate loan portfolio reached RUB12.3 trln as of January 1, 2016.

The Bank lent about RUB160 bn to retail clients in December, from the beginning of the year was over RUB1.2 trln. Total retail loan portfolio increased by RUB16 bn, or 0.4%, in December to exceed RUB4.1 trln as of January 1, 2016. The share of mortgages in total retail portfolio increased to 54% from 48% over the year.

Overdue loans of total loans decreased by 0.1p.p. to 3.3% in December. The level of overdue loans at Sberbank remains substantially lower than the level of the banking sector's average (6.6% as of December 1, 2015).

Securities portfolio was up by RUB265 bn in December, or by 13.1%, primarily due to purchases of corporate Eurobonds and FX revaluation. The portfolio ending balance reached RUB2.3 trln as of January 1, 2016.

Retail deposits and accounts increased by RUB908 bn in December, or up by 9.1% (excluding the effect from FX revaluation the portfolio increased by 6.7%). Overall retail deposits and accounts portfolio reached almost RUB10.9 trln as of January 1, 2016. Since the beginning of the year retail funds increased by 27.5%, whereas the portfolio was up by 5.9% during the last year.

Corporate funding increased by RUB449 bn in December, or by 7.1%, due to inflow of ruble funds from deposits as well as FX revaluation. Overall corporate clients' funding increased by 32.9% to reach RUB6.7 trln by the end of the year.

A record inflow of ruble funding from clients in December allowed to minimize the volume of funds borrowed from the Central Bank. Their share (excluding the subordinated loan) in total liabilities fell to 1.3% in December from 2.7% (as of 1/1/2015 the share was 15.2%). Altogether the Bank redeemed RUB3.0 trln of the Central Bank and Federal Treasury funding during the year.

Core Tier 1 and Tier 1 capital (equal since Sberbank does not have instruments of additional capital) reached RUB1.753 trln as of January 1, 2016 under preliminary calculations. Total capital amounted to RUB2.679 trln on the same date, up by RUB39 bn in December primarily due to net profit.

Capital adequacy ratios under preliminary calculations as of January 1, 2016 were:

- N1.1 - 8.0% (minimum adequacy level, required by the Central Bank of Russia at 5.0%)

- N1.2 - 8.0% (minimum adequacy level, required by the Central Bank of Russia at 6.0%)

- N1.0 - 12.1% (minimum adequacy level, required by the Central Bank of Russia at 10.0%, considering Deposit Insurance Regulation).

Sberbank 2015 Financial Highlights excluding the effect of subsequent events (under RAS, non-consolidated)

15.01.2016 The EquityStory.RS, LLC Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de

--------------------------------------------------------------------------- Language: English Company: Sberbank 19 Vavilova St. 117997 Moscow Russia Phone: +7-495-957-57-21 Fax: E-mail: media@sberbank.ru Internet: www.sberbank.ru ISIN: US80585Y3080, RU0009029540, RU0009029557, US80585Y4070 Listed: Open Market (Entry Standard) in Frankfurt ; London, MICEX, RTS End of Announcement EquityStory.RS, LLC News-Service ---------------------------------------------------------------------------