Sberbank reports 1Q 2019 Net Profit of RUB 226.6 bn under International Financial Reporting Standards (IFRS)
Moscow, April 30, 2019 - Sberbank (hereafter "the Group") has released its interim condensed IFRS financial statements (hereafter "the Financial Statements") as at and for the 3 months ended 31 March 2019, with report on review by AO PricewaterhouseCoopers Audit. All information is presented net of Denizbank A.S. operations, unless stated otherwise.
The 1Q 2019 Financial Highlights:
Selected Financial Results
* Total equity attributable to shareholders of the Bank / Total numbers of shares outstanding (ordinary + preferred)
** Net interest margin was recalculated as working assets adjusted for the amount of provisions, created against Stage 3 loans
*** Operating income before provisions for debt financial assets, credit related commitments and revaluation of loans at fair value due to change in credit quality
Selected Balance Sheet Results
* Before credit related commitments and combined loans at amortized cost and at fair value
Net interest income was RUB337.5 bn in 1Q 2019, up by 1.2% y/y.
Total interest income was up by 11.4% to RUB580.4 bn in 1Q 2019 on the background of the loan portfolio growth. Total gross loans (at amortized cost and at fair value) increased by 13.8% to RUB20.8 trn. The yield on working assets decreased by 30 basis points y/y.
Total interest expense for 1Q 2019 increased by 30.7% to RUB221.7 bn from 1Q 2018 on the back of growth of interest bearing liabilities by 16.3% and cost of funding increase by 40 basis points y/y.
Net LDR ratio comprised 90.5% and came down by 3.2% as compared to 4Q 2018. The ratio in Rubles decreased to 99.8%, while in U.S. dollars came at 61.7% and in Euro at 84.7%.
The Group net fee and commission income for 1Q 2019 came at RUB104.5 bn, up by 10.7% y/y supported mainly by bank card operations up by 24.0% and client operations with foreign currencies and precious metals up by 15.1%.
Growth of sales of investment insurance for 1Q 2019 exceeded 11.0% compared to 1Q 2018. Assets under management of the Wealth Management business achieved RUB1.3 trn.
The Group operating expenses (staff and administrative) for 1Q 2019 came at RUB152.3 bn, up by 4.3% as compared to the same period a year ago. The increase was explained by the change in capitalization principles of expensing for in-house developed IT products in light of optimization of operations of the Technology Block. Apart from that it was influenced by Ruble devaluation as compared to 1Q 2018 and VAT rate increase from the beginning of the year. Excluding these factors operating expenses would have decreased by 0.5%.
The Group Cost-to-Income ratio*** improved up to 31.9%.
Net credit loss allowance charge for loans at amortized costs amounted to RUB 22.1 bn for 1 quarter 2019. This translates into Cost of Risk at 44 bps for this loan book. According to IFRS 9 part of the loan portfolio is accounted at fair value through profit or loss. Negative revaluation of loans at fair value due to change in credit quality amounted to RUB28.2bn in 1Q 2019. Consequently, the combined Cost of Risk for loans at amortized cost and at fair value in 1Q 2019 was 96 basis points. Starting from 1Q19 we exclude FX-component from provision charge/ recovery for FX-denominated loans at amortized cost as well as from revaluation of FX-denominated loans at fair value. This FX component was shown as foreign exchange translation (losses) / gains and amounted to RUB 31.5 bn for the reporting period.
The total provision coverage of Stage 3 and POCI loans increased in 1Q 2019 compared to the previous quarter and comprised 91.9%. The share of Stage 3 and POCI loans in total gross loans at amortized cost improved by 17 basis points and came to 7.9%.
The Group's total capital under Basel III reached RUB4.08 trn as of 31/03/2019, up by 3.3% as compared to 31/12/2018, mainly on the back of retained earnings.
The Group's risk-weighted under IRB approach assets were down by 1.0% to RUB31.5 trn during 1Q 2019 due to decrease in credit risk. The Group leverage ratio improved from 11.3% to 11.8% in 1Q 2019.
Common equity Tier 1 capital adequacy ratio improved by 78 basis points and came at 12.63%, while total capital adequacy ratio - by 53 basis points up to 12.96% as of 31/03/2019.
i Including corresponding line from discontinued operations, that, effective May 2018, Denizbank is classified as
ii Other non-interest income / (expense) includes: Net gains from non-derivative financial instruments at fair value through profit or loss excluding revaluation of loans at FV through P&L due to change in credit quality; Net gains from financial instruments at fair value through other comprehensive income ; Impairment of investment securities available-for-sale ; Net gains / (losses) from derivatives, trading in foreign currencies, foreign exchange and precious metals accounts translation; Impairment of non-financial assets; Net gains on initial recognition of financial instruments and on loans restructuring; Net recovery of / (charge for) other provisions ; Revenue of non-banking business activities ; Cost of sales and other expenses of non-banking business activities ; Net premiums from insurance and pension fund operations; Net claims related to insurance and pension fund operations; Income from operating lease of equipment; Expenses related to equipment leased out; Other net operating income
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Document title: Sberbank Financial Statements 1Q2019 IFRS
|ISIN:||US80585Y3080, RU0009029540, RU0009029557, US80585Y4070|
|OAM Categories:||2.2. Inside information|
|EQS News ID:||805185|
|End of Announcement||EQS News Service|