OREANDA-NEWS. March 18, 2011. Please note that the data are prepared in accordance with Sberbank’s internal methodology, reported the press-centre of Sberbank.

Also note that the numbers as of 1 January 2011 exclude the effect of events occurring after the balance sheet date.

Income Statement Highlights for January-February 2011 (as compared to January-February 2010)

Net interest income increased by 1.4% y-o-y

Net fee and commission income grew 7.4% y-o-y

Provision charge amounted to RUB3.2 bn vs. RUB33.6 bn for January-February 2010

Operating income before provisions increased by 12.1% y-o-y

Operating income after provisions grew 1.8 times y-o-y

Operating expenses were up by 26.9% y-o-y

Profit before tax amounted to RUB59.1 bn vs. RUB25.3 bn for January-February 2010  

Net profit totaled RUB52.8 bn vs. RUB24.4 bn for January-February 2010 

Net interest income increased by 1.4% y-o-y in January-February 2011, which was mainly due to higher income earned on retail loans (+16.4% y-o-y) and on investment portfolio (+5.2% y-o-y) as well as reduced interest expense on customer accounts and amounts due to other banks.

Net fee and commission income was up 7.4% y-o-y, with banking cards and retail loan insurance being the major contributors. The financial result on trading operations came close to zero as compared to losses recorded for the same period a year ago. Trading revenues are largely affected by specifics of Russian accounting for derivatives.

Operating income before provisions grew 12.1% y-o-y. Operating expenses rose by 26.9% y-o-y, largely on the back of higher staff costs which increased in line with planned wage adjustments. Cost to income ratio stood at 34.3%.

The Bank allocated RUB3.2 bn in provisions in January-February 2011, with all of them being for losses on other assets, including provisioning for credit-related obligations. In the meantime, there was a net provision release for loan impairments worth of RUB0.1 bn. Provision charge decreased substantially as compared with January-February 2010.

Operating income after provisions was 1.8 times higher from a year ago. Profit before tax was RUB59.1 bn and net profit totaled RUB52.8 bn, twice higher that for January-February 2010.

For January-February 2011, assets remained virtually unchanged at RUB8,549 bn. Expansion of corporate and retail loan portfolios came along with reduction in cash and settlement accounts. On the liabilities side, a decent outflow from corporate and interbank accounts was offset by an increase in equity due to higher retained earnings. The balance sheet was affected by negative foreign currency revaluation as a result of ruble strengthening versus US dollar and euro.

Corporate loan book increased by 1.7% ytd to RUB4,848 bn. For the first two months of 2011, the Bank granted more than RUB580 bn loans to Russian companies, including RUB310 bn in February. For the same period a year ago, corporates received RUB470 bn. Retail loan portfolio grew 1.0%  ytd to RUB1,314 bn, with the amount of loans issued exceeding RUB120 bn.

The quality of the loan portfolio improved further in February: The overdue loans as percentage of the total book decreased from 5.04% at the beginning of the year to 4.97%.  The Bank retains high coverage ratio. As of 1 March 2011, loan-loss provisions amounted to RUB665 bn, or 2.2 times overdue loans.

Investment portfolio was little changed in January-February, with the balance standing at RUB1,768 bn. There was a partial reduction of CBR bonds in favor of corporate bonds. As a result, government bonds account for 66% and corporate bonds – for 21% of the portfolio.

After a typical decline in January customer funds inflow resumed. In February, retail deposits increased by RUB109 bn or 2.3% m-o-m to RUB4,813 bn, while corporate accounts and deposits added RUB59 bn or 3.4% m-o-m to RUB1,818 bn. For the first two months of 2011, retail funds were marginally higher (+0.1%) and corporate accounts decreased (-2.6%).

Regulatory capital (under CBR regulation No. 215-P) increased by RUB21 bn ytd to RUB1,273 bn. In spite of the net profit earned in February, it was not transferred to the regulatory capital as the supplementary capital exceeded the core capital.  Capital adequacy ratio stood at 18% as of 1 March 2011.