DGAP-News: Sberbank of Russia

DGAP-News: Sberbank: Sberbank releases Financial Highlights for FY2015 (under IFRS; consolidated)

Sberbank / Key word(s): Quarter Results/Quarter Results

15.03.2016 08:26

Dissemination of a Corporate News, transmitted by EquityStory.RS, LLC - a company of EQS Group AG. The issuer / publisher is solely responsible for the content of this announcement.

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Sberbank reports 2015 Net Profit of RUB222.9 bn, or RUB10.36 per ordinary share, under International Financial Reporting Standards (IFRS) March 15, 2016

Moscow, March 15, 2016 - Sberbank (hereafter "the Group") has released its Annual consolidated IFRS financial statements (hereafter "the Financial Statements") as at and for the 12 months ended 31 December 2015, with audit report by Ernst & Young Vneshaudit. "During the year 2015 we experienced difficult macroeconomic conditions yet we were able to achieve double-digit return on equity, which was made possible due to recovery of our net interest income, strong fee & commission income and robust cost discipline. I would also like to note our achievements in launching of our unified core banking platform and successful consolidation of regional banks and reorganization of some head office functions, which will improve our operational efficiency and decrease our time-to-market of new products. Finally, I am happy to report strong progress in our digital strategy with close to 25 mln active users of our online banking services at year-end 2015," said Herman Gref, President, Chairman of the Executive Board.

The 2015 Financial Highlights:

* The Group net profit reached RUB222.9 bn, or RUB10.36 per ordinary share * The Group return on equity (ROE) reached 10.2% p.a. * The Group capital position improved during the year, with core capital adequacy ratio up by 30 basis points to 8.9%, while total capital adequacy ratio reached 12.6%, up by 50 basis points during the year * Client deposits growth up 27.2% to RUB19.8 trn in 2015 compared to 2014, with retail deposits increasing 29.1%, while corporate deposits growing 24.4%, reducing dependency on state funding * Total loan portfolio before provision for loan impairment increased by 7.0% in 2015, the drivers of which were mortgages and commercial loans, up by 12.5% and 14.9% respectively. Sberbank's domestic market share in mortgages reached 55.6% * Net loan-to-deposit ratio came at 91.9% on the back of the improving funding base

The Q4 2015 Financial Highlights:

* Sberbank's net profit reached RUB72.6 bn, or RUB3.40 per ordinary share, for the quarter, up by 48.2% compared to Q4 2014 * Quarterly annualized ROE 12.6%, up by 290 basis points compared to Q4 2014 * The quarterly cost of Risk (CoR) came at 230 bp, down by 49 basis points compared to Q3 2015. CoR of the retail portfolio was 49 bp, down by 162 basis points compared to Q3 2015. The pace of retail asset quality deterioration continued to slow down during the quarter, particularly of consumer unsecured loans * Client deposits growth up 8.3% to RUB19.8 trn in Q4 2015 compared to Q3 2015. Retail deposits increased by 10.6%, while corporate deposits increased by 4.9% during the quarter * The level of non-performing loans (NPLs) of total loan portfolio came down to 5.0% from 5.4% a quarter ago, while coverage level of NPLs improved to 1.2X from 1.1X during the quarter



Selected Financial Results RUB bn, unless stated otherwise 4Q 2015 3Q 2015 4Q 2014 4Q15/ 3Q15 4Q15/ 4Q14 12M 2015 12M 2014 12M15/ 12M14

Net interest income 297.2 263.4 274.6 12.8% 8.2% 988.0 1 019.7 (3.1%) Net fee and commission income 95.6 81.9 80.2 16.7% 19.2% 319.0 259.2 23.1% Other non-interest income 25.8 22.2 -3.8 16.2% n/a 122.8 21.8 463.3% Total revenues 418.6 367.5 351.0 13.9% 19.3% 1 429.8 1 300.7 9.9% Net provision charge for impairment of debt financial assets (112.7) (130.1) (106.0) (13.4%) 6.3% (475.2) (361.4) 31.5% Operating expenses (191.7) (145.4) (177.0) 31.8% 8.3% (623.4) (565.1) 10.3% Net profit 72.6 65.1 49.0 11.5% 48.2% 222.9 290.3 (23.2%) Earnings per ordinary share, RUB 3.40 3.04 2.32 11.8% 46.6% 10.36 13.45 (23.0%) Total comprehensive income 133.7 80.0 6.5 67.1% 20.6X 365.8 214.6 70.5% Book value per share, RUB 110.0 103.9 93.6 5.9% 17.5% 110.0 93.6 17.5% Ratios Return on equity 12.6% 11.8% 9.7% 0.8 pp 2.9 pp 10.2% 14.8% (4.6 pp) Return on assets 1.1% 1.1% 0.9% unch. 0.2 pp 0.9% 1.4% (0.5 pp) Net interest margin 4.9% 4.7% 5.4% 0.2 pp (0.5 pp) 4.4% 5.6% (1.2 pp) Cost of risk 2.3% 2.8% 2.4% (0.5 pp) (0.1 pp) 2.5% 2.3% 0.2 pp Cost-to-income ratio 45.8% 39.6% 50.4% 6.2 pp (4.6 pp) 43.6% 43.4% 0.2 pp

Net interest income was RUB297.2 bn in Q4 2015, up by 8.2% from the year-ago period: * Interest income (up 14.9% to RUB598.9 bn compared to Q4 2014) was driven by a moderate pick up in corporate lending and mortgages. * Interest expenses including deposit insurance expenses increased by 22.3% from Q4 2014 to RUB301.7 bn. The cost of liabilities decreased by 50 basis points to 5.3% in Q4 2015 relative to Q3 2015, driven by both corporate and retail term deposits, cost of which came down by 50 basis points to 5.0% and by 40 basis points to 6.7%. The amount of funds borrowed from the Central Bank of Russia, excluding the subordinated debt received from the Bank of Russia, was reduced by 73.4% in Q4 2015 to RUB269.8 bn. Improved access to liquidity allows Sberbank to be more flexible in managing its cost of funding. The Group's Q4 2015 net fee and commission income came at RUB95.6 bn, up by 19.2% from the year-ago period. The income from cash and settlement transactions business (RUB87.0 bn) accounted for a strong 75.7% share in total fees and commissions income in the fourth quarter. Sberbank continued to strengthen its domestic market share in acquiring and banking cards business. Income from the banking cards operations increased by 48.6% in Q4 2015 from the same period a year ago. Net provision charge for loan impairment for Q4 2015 totaled RUB112.3 bn compared to RUB103.4 bn for Q4 2014. This translated into the cost of risk of 230 basis points for the quarter versus 240 basis points a year ago. * The cost of risk for corporate loans decreased by 10 basis points to 292 basis points in Q4 2015 relative to the previous quarter of 2015. * The cost of risk for retail loans dropped by 162 basis points to 49 basis points in Q4 2015 relative to the previous quarter of 2015. The Group's operating expenses for Q4 2015 increased to RUB191.7 bn, up by 8.3% from the same period a year ago, whereas the average for the same period domestic Inflation was 14.5%.

Selected Balance Sheet Results RUB bn 31/12/15 30/09/15 31/12/14 12M-9M 2015 12M15-12M14 Total net loans 18 727.8 17 948.7 17 756.6 4.3% 5.5% Total gross loans 19 924.3 19 092.9 18 626.1 4.4% 7.0% Corporate loans 14 958.7 14 204.7 13 778.8 5.3% 8.6% Retail loans 4 965.6 4 888.2 4 847.3 1.6% 2.4% Renegotiated loans 3 423.8 3 296.7 2 452.5 3.9% 39.6% Securities portfolio 2 906.0 2 329.1 2 231.9 24.8% 30.2% Assets 27 334.7 25 934.4 25 200.8 5.4% 8.5% Total deposits 19 798.3 18 286.5 15 562.9 8.3% 27.2% Retail deposits 12 043.7 10 893.1 9 328.4 10.6% 29.1% Corporate deposits 7 754.6 7 393.4 6 234.5 4.9% 24.4% Ratios Net loans-to-deposits ratio 91.9% 95.3% 110.8% (3.4 pp) (18.9 pp) NPL ratio 5.0% 5.4% 3.2% (0.4 pp) 1.8 pp NPL coverage ratio 1.2X 1.1X 1.4X Renegotiated-to-gross loans 17.2% 17.3% 13.2% (0.1 pp) 4.0 pp

Total loans, net, increased by 4.3% to RUB18,727.8 bn in Q4 2015 as compared to Q3 2015. The growth of the corporate loan portfolio was influenced by currency revaluation. The increase of retail loans was driven by continued demand for mortgages.

Client deposits demonstrated strong growth, which was achieved in both retail and corporate segments, up by 10.6% and 4.9% respectively in Q4 2015 as compared to the previous quarter of 2015. Current accounts increased by 7.5% in the same period.

Total NPL ratio decreased to 5.0% in Q4 2015 from 5.4% in the previous quarter of 2015 mainly driven by the corporate segment. Coverage level of the NPL portfolio by provisions increased to 1.2X in Q4 2015 from 1.1X in the previous quarter. The share of renegotiated loan portfolio remained stable at just over 17% of total loan portfolio in Q4 2015 relative to Q3 2015, reaching RUB3.4 trn. The quarterly asset quality dynamic within the renegotiated portfolio reflected macroeconomic conditions resulting in slight increase in the NPL ratio within the renegotiated loan portfolio from 10.3% to 11.0%.

Selected Equity Position Results Under Basel I RUB bn 31/12/15 30/09/15 31/12/14 12M-9M 2015 12M15-12M14 Total Tier 1 capital 2 226.7 2 150.8 2 007.8 3.5% 10.9% Total capital 3 151.2 3 046.7 2 835.3 3.4% 11.1% Risk-weighted assets 24 995.5 23 618.8 23 365.0 5.8% 7.0% Equity 2 375.0 2 242.7 2 020.1 5.9% 17.6% Ratios Core capital adequacy ratio 8.9% 9.1% 8.6% (0.2 pp) 0.3 pp Total capital adequacy ratio 12.6% 12.9% 12.1% (0.3 pp) 0.5 pp

The Group's total capital increased by 3.4% to RUB3.2 trn in Q4 2015 relative to Q3 2015 primarily as a result of retained net profit as well as other comprehensive income for the quarter.

The Group's risk-weighted assets increased by 5.8% in Q4 2015 from Q3 2015 to RUB25.0 trn, driven mainly by currency fluctuations. The total capital adequacy ratio (Basel I) declined by 30 basis points in Q4 2015 from Q3 2015 to 12.6%. The core capital adequacy ratio decreased by 20 basis points in Q4 2015 from Q3 2015 to 8.9%.

15.03.2016 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 ---------------------------------------------------------------------------