DGAP-News: Sberbank of Russia

DGAP-News: Sberbank: Sberbank releases Financial Highlights for 5M 2016 (under RAS; non-consolidated)

Sberbank / Key word(s): Miscellaneous/Miscellaneous

07.06.2016 09:44

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Sberbank releases Financial Highlights for 5M 2016 (under RAS; non-consolidated) Please note that the numbers are calculated in accordance with Sberbank's internal methodology. June 7, 2016 Key highlights for May, 2016: * The Bank earned net profit of RUB42.0 bn in May * Profitability improvement continues thanks to net interest income and fee and commission income growth * Inflow of clients' funds in the amount of RUB271 bn allowed the Bank to reduce the share of government funding in liabilities to 0.7% (excluding subordinated debt) * Corporate overdue loans continued to decline (-RUB11 bn in May) due to planned actions in resolving problem debts Deputy Chairman of Sberbank Alexander Morozov stated: "Operating income growth on the back of stabilization of the loan portfolio quality and strict cost control ensured organic capital creation. These factors should continue to support capital creation going forward to enable us to achieve capital adequacy ratio target for the year."

Comments for 5M 2016: Net interest income came at RUB446.8 bn, by 63.2% compared to 5M 2015: Interest income increased by 7.6%, mostly driven by the increase in volumes of working assets; Interest expenses came down by 21.7% due to the decrease in market rates and the substitution of state funding with clients' funds. Fee and commission income was up by 28.6% to RUB118.7 bn, driven by transactional business with bank cards and acquiring, cash settlements as well as bank insurance. Net income from FX revaluation and trading operations on capital markets amounted to -RUB24.3 bn, in May coming at RUB5.8 bn. Operating expenses increased by 8.5%, which was significantly slower than pre-provision operating income growth (+48.0%). The increase in operating expenses was driven by indexation of wages. Total provision charges amounted to RUB138.3 bn vs. RUB139.5 bn a year ago. The Bank continues to form loan-loss provisions in-line with the requirements of the Central Bank of Russia. Loan-loss provisions are 2.1 times the overdue loans. Net profit before income tax came at RUB238.2 bn vs. RUB71.8 bn for 5M 2015. Net profit totaled RUB184.3 bn, which was 3.1 times higher than the result for 5M 2015. Total comprehensive income amounted to RUB229.1 bn (this item, in addition to net profit, includes net income from revaluation of financial assets available-for-sale and held-to-maturity). Assets in May decreased immaterially, by 0.3%. The Bank lent about RUB540 bn to corporate clients in May. Corporate loan issues from the beginning of the year reached RUB3.3 trln. The loan portfolio ending balance increased by RUB56 bn; total corporate loan portfolio reached RUB11.9 trln. The Bank lent about RUB120 bn to retail clients in May. Retail loan issues from the beginning of the year exceeded RUB580 bn. Total retail loan portfolio increased by RUB14 bn in May to reach RUB4.2 trln as of June 1, 2016. The share of mortgages in retail portfolio exceeds 55%. Thanks to a number of undertaken measures the level of corporate overdue loans was reduced by RUB11 bn in May, and by RUB38 bn, or by 10%, since the beginning of the year. Overdue loans of total loans were down to 3.2% in May from 3.3%. The level of overdue loans at Sberbank remains substantially lower than the level of the banking sector's average (6.9% as of May 1, 2016). Securities portfolio was up by RUB39 bn in May due to corporate bonds. The portfolio ending balance was RUB2.4 trln as of June 1, 2016. Total deposits and accounts increased by RUB271 bn in May, or by 1.6%. Retail deposits and accounts increased by RUB119 bn to RUB10.8 trln, while corporate deposits and accounts increased by RUB153 bn to RUB6.5 trln. Inflow of client funds allowed to reduce the volume of more expensive funds borrowed from the Central Bank and Federal Budget in the amount of RUB311 bn in May. Their share (excluding the subordinated loan) in total liabilities was 0.7% as of June 1, 2016. Core Tier 1 and Tier 1 capital (equal since Sberbank does not have instruments of additional capital) reached RUB1,954 bn as of June 1, 2016 under preliminary calculations. The audited net profit for 1Q2016 was the major growth factor of Core Tier 1 and Tier 1 capital in May. Total capital amounted to RUB2,770 bn as of June 1, 2016. Risk-weighted assets increased by RUB126 bn in May under preliminary calculations mainly due to the increase of corporate loan portfolio and AFS securities. Capital adequacy ratios under preliminary calculations as of June 1, 2016 were: * N1.1 - 8.3% (minimum adequacy level, required by the Central Bank of Russia at 4.5%) * N1.2 - 8.3% (minimum adequacy level, required by the Central Bank of Russia at 6.0%) * N1.0 - 11.8% (minimum adequacy level, required by the Central Bank of Russia at 8.0%, considering Deposit Insurance Regulation).

Sberbank 5M 2016 Financial Highlights (under RAS, non-consolidated)

07.06.2016 The EquityStory.RS, LLC Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at 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 ---------------------------------------------------------------------------