OREANDA-NEWS. January 20, 2012. 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, 2011 but excluded from those as of January 1, 2012, reported the press-centre of Sberbank.

Income Statement Highlights for 2011 (as compared to 2010)

Net interest income grew 15.5% y-o-y

Net fee and commission income rose by 8.4% y-o-y

Operating income before total provisions increased by 14.1% y-o-y

Total provisions amounted to RUB5.1 bn vs. provision charge of RUB155.5 bn for 2010

Operating income after total provisions increased 1.5-fold y-o-y

Operating expenses rose by 26.9% y-o-y

Profit before tax amounted to RUB394.0 bn vs. RUB223.1 bn for 2010

Net profit totaled RUB321.9 bn for 2011, excluding the effect of events after the balance sheet date.

Operating income before total provisions increased by 14.1% in 2011.

Net interest income rose 15.5%, which was due to rising interest income as well as lower interest expenses.

Interest income was up 5.2% on the back of expansion in the working assets and a shift in  the asset mix toward higher-margin products;

Interest expenses fell by 10.8% due to cheaper cost of funds raised from customers and other banks.

Net fee and commission income increased by 8.4% owing to increased volume of fee-generating operations, primarily operations with bank cards. Income from bank cards’ operations increased 1.5-times as a result of growth in the number of cards issued and volume of related transactions.

Gains from trading on financial markets were higher in 2011 by 20.1% supported by gains from conversion operations and transactions with precious metals.

The Bank kept on creating provisions on new loans. In the meantime, there was a write-back of provisions on a number of loans as a result of planned work with distressed assets and reduced losses from assignment sales. The total provision charge for 2011 was worth RUB5.1 bn vs. RUB155.5 bn in 2010.

Operating expenses rose by 26.9% both due to higher staff costs on the planned increases in salaries and costs incurred in relation to the Bank’s continuing implementation of its strategy and business development.

Profit before tax totaled RUB394.0 in 2011 and net profit excluding the effect of events after the balance sheet date amounted to RUB321.9 bn. Both figures significantly exceeded the result of 2010 and made historical record highs. The Bank ended 2011 with ROE at 27.1% and ROA at 3.6%.

The Bank’s assets increased by almost RUB2 trln or 22.5% to RUB10.5 trln in 2011. In December assets added RUB577 bn or 5.8%. Loan portfolio expansion was the main driver - up by RUB485 bn in December and by RUB2.1 trln for the year – to RUB8.2 trln:

The Bank lent Russian corporate clients about RUB850 bn in December, which was the largest in three years. Overall, corporate loans issued in 2011 exceeded RUB5.5 trln, which was 28% more than a year ago. The balance of corporate loan portfolio increased by a third for the year and stood at RUB6.4 trln as of January 1, 2012.

The Bank issued over RUB190 bn of retail loans in December, which was also the largest in three years. In 2011, retail customers received more than RUB1.2 trln in loans or 1.7 times higher than in 2010. The retail loan portfolio increased by 36.6% to RUB1.8 trln as of December 1, 2012. Growth was equally spread across the regions.

The expansion of loan portfolio was accompanied by a remarkable improvement in its quality: Overdue loans as a percentage of the total book decreased from 5.04% to 3.36%. Coverage ratio remained strong with loan-loss provisions at RUB631 bn or 2.3 times the overdue loans as of January 1, 2012.

Given that the Bank traditionally keeps high amounts of cash, including abundant stocks in ATMs, ahead of holidays, the cash balance increased more than 1.5 times in December to RUB431 bn.

Investment portfolio was virtually unchanged in December and stood at RUB1.5 trln as of January 1, 2012. For the year, the portfolio squeezed by RUB281 bn or 15.9%, which was mainly due to redemptions of CBR bonds (bonds of the Bank of Russia) and OFZ (federal bonds). In the meantime, corporate bond portfolio grew by a third to RUB465 bn. The share of government bonds fell from 67% to 52%, corporate bonds increased from 20% to 31%.

Customer accounts and deposits remain the core source of funding. December saw inflows of RUB400 bn in the retail segment and about RUB220 bn from corporates. For the year, retail accounts and deposits increased by 18.1% to RUB5.7 trln, corporate fund were up 16.1% to 2.2 trln, mainly led by growth in term deposits.

Regulatory capital (under CBR regulation No. 215-P) rose by RUB19.5 bn in December to RUB1,527 bn on net profit increase. The regulatory capital increased by 23% year-to-date.

The financial results for 2011 exclude the effect of subsequent events and remain subject for adjustment thereafter.