OREANDA-NEWS. January 18, 2013. 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, 2012 but excluded from the numbers as of January 1, 2013.

Income Statement Highlights for 2012 (as compared to 2011):

Net interest income grew 23.3% y-o-y

Net fee and commission income grew 12.3% y-o-y

Operating income before total provisions increased by 20.1% y-o-y

Total provision charge was RUB33 bn vs. a RUB6 bn charge for 2011

Operating expenses were up by 18.7% y-o-y

Profit before tax amounted to RUB440 bn vs. RUB384 bn for 2011

Net profit excluding the effect of subsequent events totaled RUB344 bn vs. RUB310 bn for 2011

Net interest income came at RUB638 bn, up by RUB121 bn or 23.3% for 2012:

Interest income increased by RUB259 bn driven by volumes growth in corporate and retail lending;

Interest expenses grew by RUB138 bn which was due to increased fund-raising along with higher market interest rates as compared to 2011.

Net fee and commission income grew by RUB21 bn to RUB194 bn for 2012.

Fees and commissions increased by RUB27 bn due to the expansion of fee-generating banking services.  Growth stemmed from most of the fee-generating services. Plastic cards and acquiring services were the largest contributors, adding about RUB22 bn for 2012.

The Bank paid RUB6 bn more in fees and commission expenses in 2012, which was mainly due to growth in operations with plastic cards.

Net gains from operations on financial markets amounted to RUB22 bn for 2012, out of which RUB13 bn was earned on conversion operations.

Total provision charges amounted to RUB33 bn for FY2012 versus RUB42 bn charge for 11 months of 2012 as a result of planned work with distressed assets.

Operating expenses were up by 18.7% in 2012. The main drivers were planned expenses related to investments, and spending, associated with the realization of the Bank’s Strategic Transformation Plan. In the meantime, operating income before provisions outpaced growth in operating expenses (20.1% vs. 18.7%, respectively). Cost-to-income ratio stood at 45.7%, down 0.5 p.p. from 2011. 

Profit before tax totaled RUB440 bn and net profit amounted to RUB344 bn for 2012. Both figures exceeded those for the same period a year ago by 15% and 11%, respectively. In spite of a negative revaluation of assets denominated in foreign currency, the Bank had a record bottom line.

Assets grew 30.0% YTD to exceed RUB13.6 trln for 2012. In December, assets increased by 3.4% m-o-m. Growth was supported primarily by lending to clients, which amounted to nearly RUB10 trln.

The Bank lent about RUB875 bn to corporate clients in December and over RUB5.9 trln for the year. Corporate loan portfolio increased by 2.7% in December to RUB7.5 trln.

Retail customers were granted over RUB150 bn December and about RUB1,85 trln for the year, which was 1.5 times greater than for 2011. Retail loan portfolio grew 1.9% in December to over RUB2.5 trln. 

Growth of the loan portfolio is accompanied by improving quality: share of overdue loans decreased by 0.25 p.p. to 2.7%. Coverage ratio remained strong, with loan-loss provisions at RUB609 bn, or 2.3 times the overdue loans as of January 1, 2013.

Given that the Bank keeps high amounts of cash for a festive season, including abundant stocks of cash in ATMs, the cash balance increased 1.5 times in December up to nearly RUB650 bn.

Investment portfolio increased by 3.6% in December to exceed RUB1.7 trln as the Bank purchased several series of OFZ (federal bonds) and prime-quality Russian corporate bonds.

Retail deposits and accounts remained the key source of funding for the Bank. The balance increased by RUB400 bn or 6.4% m-o-m in December, with inflows seen both on deposits and saving certificates. In 2012, retail deposits and accounts increased by almost RUB1 trln or 17.4% to RUB6.7 trln.

Corporate deposits and accounts remained virtually unchanged in December as fund inflows from corporate clients in the amount of RUB125 bn was offset by redemptions of Treasury deposits.

Regulatory capital (under CBR regulation No. 215-P) stood at RUB1,678 bn as of January 1, 2013. Capital increased by 10.7% in 2012, with net profit and subordinated bonds issued in October being the main sources of growth.

Capital adequacy ratio of the Bank (under RAS) stood at 12.5% as of January 1, 2013.

The financial results for 2012 exclude the effect of subsequent events and remain subject for adjustment thereafter.