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Sberbank: Sber reports 3Q 2021 Net Profit of RUB348.3 bn under International Financial Reporting Standards (IFRS)

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Sberbank (SBER)
28-Oct-2021 / 10:00 MSK
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.

Sber reports 3Q 2021 Net Profit of RUB348.3 bn under International Financial Reporting Standards (IFRS)

 

Moscow, October 28, 2021 - Sberbank (hereafter "the Group" or "Sber") has released its interim condensed IFRS financial statements (hereafter "the Financial Statements") as at and for the 9 months ended 30 September 2021, with report on review by AO PricewaterhouseCoopers Audit.

 

 

Alexandra Buriko, CFO, stated:

 

'For 9M 2021, Sber earned RUB978 bn in net profit - thus hitting a historical record. Return on equity came in at 25.8%.

Growth momentum was obvious across all key business segments. In the banking business, the retail loan portfolio continues to expand, while corporate lending has accelerated along with improvement in the asset quality. The payment business is driven by client transactional activity. The wealth management and insurance businesses are developing rapidly on the back of new product launches in 3Q 2021. Revenues of the non-financial business segment increased 3 times y/y for 9M 2021 and exceeded RUB120 bn.

Penetration of ecosystem services is rising, thanks to the development of the unified elements. A single login, Sber ID, is now used by 27 mn clients, and allows access to 135 of Sber own and partner services. The number of SberPrime subscribers has reached more than 3.7 mn. Client engagement of SberBank Online DAU/MAU has exceeded 50% for the first time, and the number of clients shopping with SberPay grew 4-fold in 3Q 2021 to 4.4 mn.

A combination of solid results and ongoing business dynamics is our rational to enhance the full-year guidance for 2021 and we expect the return on equity to come in above 23%.'

 

 

 

 

Key financial and operating highlights for the reporting period

 

 

 

 

Key metrics of client activity

mn, unless stated otherwise

30.09.2021

30.06.2021

31.12.2020

30.09.2021/

30.06.2021

30.09.2021/

31.12.2020

Number of active retail clients

102.8

101.5

100.5

1.3

2.3

Number of monthly active users (MAU) of mobile App SberBank Online

71.3

68.9

65.4

2.4

6.0

Number of daily active users (DAU) of mobile App SberBank Online

35.7

33.9

32.4

1.8

3.3

Number of active corporate clients

3.0

2.9

2.8

0.1

0.2

 

 

 

Statement of Profit or Loss Overview

The Group net interest income was up by 14.2% y/y in 3Q 2021 to RUB469.6 bn. The increase was attributable to expanding volume and higher yields of the working assets (see Banking business segment). Interest expenses grew by 30% y/y due to increased rate of deposit insurance allocations. Excluding this effect, net interest income increased by 15%. Net interest income for 9M 2021 was up by 12.6% y/y to RUB1,330.6 bn.

The Group net fee and commission income increased by 11.2% y/y for in 3Q 2021 to RUB164.3 bn, driven by bank cards operations (see Payment business segment).  The net fee and commission income growth in 9M 2021 was up by 15.6% y/y to RUB455.7 bn, which was also due to the low-base effect in 1H 2020 when client transactional activity slowed down under the COVID-related restrictions.

Other operating income. In 3Q 2021, the Group classified assets of the subsidiary bank in Ukraine as restricted assets. The reason for such classification was the regulatory restrictions that do not allow the Group to manage fully the mentioned assets. The Group recorded provisions in relation to these assets in the amount of RUB33.3 bn in 3Q 2021. 

The Group operating expenses amounted to RUB210.1 bn in 3Q 2021, up by 20.6% y/y. The growth was driven by payroll indexation in 3Q 2021, the calendarization effect and expenses related to non-financial businesses that led to headcount increase to 281.7 K (+5.6 K in the quarter). For 9M 2021, OpEx grew by 15.1% y/y to RUB591.6 bn. 

Cost-to-Income ratio for the financial business 4 improved by 60 bp to 29.4% in 3Q2021, and came in at 29.6% for 9M 2021.

Combined provision charge including revaluation of loans at fair value amounted to RUB57.2 bn for 3Q 2021, and RU110.7 bn for 9M 2021. Cost of Risk was stabilizing on the back of expansion in the corporate and retail loan portfolios, and came in at 85 bp for 3Q 2021 and at 57 bp for 9M 2021.

 

RUB bn, unless stated otherwise

3 кв 2021

3 кв 2020

2 кв 2021

3кв2021/  3кв2020,    % изм

3кв2021/       2кв2021,    % изм

9 мес 2021

9 мес 2020

9мес2021/       9мес2020,     % изм

Net interest income

469.6

411.3

439.5

14.2%

6.8%

1 330.6

1 181.7

12.6%

Net fee and commission income

164.3

147.7

157.1

11.2%

4.6%

455.7

394.1

15.6%

Other non-interest income / (expense) 5

-11.1

32.3

35.4

-134.4%

-131.4%

57.7

37.4

54.3%

Operating income before provisions 5

622.8

591.3

632

5.3%

-1.5%

1 844.0

1 613.2

14.3%

Net charge related to change in asset    quality 6 

-56.5

-85.7

-27.2

-34.1%

107.7%

-109.2

-385.7

-71.7%

Net loss allowance / (provision) for credit related commitments

-4.3

1.9

-6.9

-326.3%

-37.7%

-17.7

-13.4

32.1%

Staff and administrative expenses

-210.1

-174.2

-201.6

20.6%

4.2%

-591.6

-514.2

15.1%

Net profit  from continuing operations

281.8

265.6

317.6

6.1%

-11.3%

904.2

552.8

63.6%

Profit / (Loss) from discontinued      operations

66.5

5.8

7.7

1 046.6%

763.6%

73.9

5.8

1174.1%

Net profit

348.3

271.4

325.3

28.3%

7.1%

978.1

558.6

75.1%

Earnings per ordinary share from       continuing operations. RUB

13.18

11.55

13.98

14.1%

-5.7%

41.38

24.94

65.9%

Earnings per ordinary share. RUB

16.28

11.82

14.34

37.7%

13.5%

44.83

25.21

77.8%

Total comprehensive income 

322.8

293.6

307.8

9.9%

4.9%

860.6

644.2

33.6%

Key financial coefficients

 

 

 

 

 

 

 

 

Return on equity  2

26.8%

22.7%

25.8%

--

--

25.8%

16.0%

--

Return on assets 3

3.6%

3.2%

3.5%

--

--

3.5%

2.2%

--

Net interest margin

5.36%

5.48%

5.22%

--

--

5.26%

5.52%

--

Cost of risk (amortized cost and FV loans)

85 bp

143 bp

43 bp

--

--

57 bp

219 bp

--

Cost-to-income ratio -financial business 4

29.4%

29.7%

30.0%

--

--

29.6%

29.7%

--

 

 

 

 

 

 

 

 

 

Book value per share 7. RUB

242.2

214.2

227.4

13.1%

6.5%

--

--

--

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Key segments overview

 

Banking business

Key 3Q 2021 Banking business segment highlights

RUB bn, unless stated otherwise

 

30.09.2021

30.06.2021

31.12.2020

30.09.2021/

31.06.2021,

% change

30.09.2021/

31.12.2020,

% change

Gross loans 8:

27 490.9

26 210.0

     25 008.6

4.9%

9.9%

Corporate loans

16 458.8

15 856.0

     15 700.4

3.8%

4.8%

Retail loans

11 032.1

10 354.0

      9 308.2

6.5%

18.5%

Deposits:

28 879.8

27 855.5

     25 765.7

3.7%

12.1%

Retail deposits

17 326.0

16 963.7

    16 641.0

2.1%

4.1%

Corporate deposits

11 553.8

10 891.8

      9 124.7

6.1%

26.6%

 

 

 

 

 

 

Net Loans / Deposits ratio (LDR)

89.8%

88.5%

90.8%

--

--

 

 

 

 

 

 

 

 

Retail loan portfolio exceeded RUB11 trn, growing by 6.5% in 3Q 2021, or by 18.5% YTD. The share of retail loans in total loan portfolio exceeded 40% for the first time. The share of sales in digital channels came to almost 60% (+1.1 pp), which increases the accessibility to lending. The yield on retail loans remained unchanged at 11.1%.

Corporate loan portfolio in 3Q 2021 reached RUB16.5 trn, adding 3.8%, or 3.7% adjusted for the impact of the FX revaluation9, primarily thanks to Ruble lending.  The portfolio was affected by the repayment of loans to state and municipal institutions in light of the replacement of their debt with budget loans. Excluding the effect of the repayment, the corporate loan portfolio increased by 5.3% in 3Q21, or 7.4% for 9M21. The yield on corporate loans moved up by 50 bp to 7.1% from increasing market rates and high share of Ruble loans at floating rates, the share of which exceeded 44% at quarter-end.

Retail funding increased by 2.1% in 3Q 2021 to over RUB17.3 trn, in part thanks to state social disbursements. The cost of retail term deposits increased by 30 bp to 4.0%.

Corporate funding was up by 6.1% to RUB11.6 trn. The cost of corporate funding increased by 80 bp to 4.3% on the back of market rates moves.

Net LDR ratio changed to 89.8% in 3Q 2021, adding 1.3pp during the quarter.

 

Key asset quality metrics

RUB bn, unless stated otherwise

30.09.2021

31.06.2021

31.12.2020

30.09.2021/

31.06.2021,

% change

30.09.2021/

31.12.2020,

% change

Stage 3 + POCI loans / total gross loans at amortized cost

5.7%

6.2%

6.6%

--

--

Provision coverage of Stage 3 + POCI loans

105.1%

101.0%

102.8%

--

--

 

Payments business

 

Wealth management and brokerage

RUB trn, unless stated otherwise

30.09.2021

30.06.2021

31.12.2020

30.09.2021/

30.06.2021, % change

30.09.2021/

31.12.2020, % change

AUM

1.99

1.89

1.75

5.3%

13.7%

AUC10

2.49

2.16

1.90

15.3%

31.1%

Assets under management increased by 5.3% in 3Q 2021, approaching RUB2 trn.  

Net assets under custody on the brokerage accounts increased by 15.3% in 3Q 2021 to RUB2.5 trn.

 

Risk insurance

Total operating income before provisions for the Risk insurance segment reached RUB25.3 bn, up by 18.2% y/y.

 

Non-financial business

Revenues11 of the Non-financial business segment increased by 2.6 times y/y to RUB47.6 bn for 3Q 2021. For 9M 2021, the segment's revenues increased by 2.8 times y/y to RUB121.7 bn.

 

Technological leadership

Sber continues tech transformation, and expands the range of product and service offerings.

 

ESG

Selected Capital Adequacy Results Overview

RUB bn, unless stated otherwise 

30.09.2021

30.06.2021

31.12.2020

30.09.2021/

30.06.2021,

% change

30.09.2021/

31.12.2020,

% change

Common equity Tier 1 capital

 5 105.7

          4 798.7

            4 719.9

6.4%

8.2%

Tier 1 capital

 5 255.7

          4 948.7

           4 869.9

6.2%

7.9%

Total capital

 5 429.8

          5 139.0

           5 008.9

5.7%

8.4%

Risk-weighted assets

 36 604.3

        34 164.0

         34 124.2

7.1%

7.3%

      Credit risk

 31 711.5

        29 772.7

        29 253.9

6.5%

8.4%

     Operational risk

 2 986.3

         2 986.3

          3 664.3

0.0%

-18.5%

     Market risk

 1 906.5

 1 405.0

 1 206.0

35.7%

58.1%

Common equity Tier 1 capital adequacy ratio

13.95%

14.05%

13.83%

--

--

Tier 1 capital adequacy ratio

14.36%

14.49%

14.27%

--

--

Total capital adequacy ratio

14.83%

15.04%

14.68%

--

--

Leverage ratio  

12.6%

12.4%

12.9%

--

--

Common equity Tier 1 capital grew 6.4% to RUB5,105.7 bn. Total capital increased by 5.7% for 3Q 2021 to RUB5,429.8 bn. 

The Group risk-weighted assets were up by 7.1% to RUB36,604.3 bn in 3Q 2021, driven by loan portfolio expansion and change in the macro add-on for retail loans. Risk-weighted assets density increased by 2.3 pp to 88.1% in 3Q 2021.

Common equity Tier 1 capital adequacy ratio and Tier 1 capital adequacy ratio in 3Q 2021 came down by 10 bp to 13.95% and by 13 bp to 14.36%, respectively, while total capital adequacy ratio decreased by 21 bp to 14.83%. 

 

 

Conference call details

Sber Conference call dedicated to consolidated IFRS results for 9M 2021 and as at September 30, 2021 will be held on October 28, 2021 at 5:00 pm Moscow time (3:00 pm London / 10:00 am New York time).

 

Conference ID: English - 6842767

Russian - 7839279

Telephone numbers:

 

Russia

+7 495 646 9190 (local access)

 8 800 286 750 11 (toll free)

UK

 +44 (0)330 336 9434 (local access)

0800 279 7209 (toll free)

USA

 +1 929-477-0402 (local access)

 888-204-4368 (toll free)

 

Webcast-Link:

https://www.webcast-eqs.com/sberbank20211028    

 

 

 

 

1 Includes discontinued operations, which included Eurocement Group from 3Q 2020

2 Excluding the subordinated loan agreement in the amount of RUB150.0 bn classified as equity financial instrument that was previously ceded by the Bank of Russia in favor of the Ministry of Finance

3 Based on profit from continuing operations

4 Operating income before provisions for debt financial assets, credit related commitments and revaluation of loans at fair value due to change in credit quality 

5 Other non-interest income / (expense) includes: Net gains / (losses) from non-derivative financial instruments at fair value through profit or loss; Net gains from financial instruments at fair value through other comprehensive income; Net gains from derivatives, trading in foreign currencies, foreign exchange and precious metals accounts translation; Net losses arising on initial recognition and modification of financial instruments measured at amortized cost; Impairment of non-financial assets; Net charge for other provisions and allowances; Revenue of non-financial and other business activities; Cost of sales and other expenses of non-financial and other business activities; Net premiums from insurance and pension fund operations; Net claims, benefits, change in contract liabilities and acquisition costs on insurance and pension fund operations; Income from operating lease of equipment; Expenses related to equipment leased out; Net share of loss of associates and joint ventures; Other net operating income / (expenses)

6 Includes net expenses from provisioning for debt financial assets and revaluation of loans at Fair Value due to changes in credit quality

7 Total equity attributable to shareholders of the Bank / Total numbers of shares outstanding (ordinary + preferred)

8 Before loan loss allowance and including loans at amortized cost and at fair value

9 Based on management accounts

10 Taking into account the change in the methodology in accounting for the revaluation of the OTC assets and REPO transactions

11 For the segment Non-financial business Revenues of the associates and joint ventures are disclosed proportionately to the ownership share of the Group in the reporting period.  For the companies of the Group Revenues are calculated on the 100% basis from the date of the control. The information does not include data on Yandex.Market and the financial results from the disposal of Yandex.Market

 

 

DISCLAIMER

This document has been prepared by Sberbank of Russia (the "Bank") and has not been independently verified. This press release does not constitute or form part or all of, and should not be construed as, any offer of, or any invitation to sell or issue, or any solicitation of any offer to purchase, subscribe for, underwrite or otherwise acquire, or a recommendation regarding, any shares or other securities representing shares in, or any other securities of the Bank, or any member of the Bank's group, nor shall it or any part of it nor the fact of its presentation or distribution form the basis of, or be relied on in connection with, any contract or any commitment whatsoever or any investment decision. The information in this press release is confidential and is being provided to you solely for your information and may not be reproduced, retransmitted or further distributed to any other person or published, in whole or in part, for any purpose.

This press release doesn't constitute an offer of securities of the Bank for sale in the United States. The Securities may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act of 1993 as amended.

This press release is only being distributed to and is only directed at (A) persons in member states of the European Economic  Area (other than the United Kingdom) who are "qualified investors" within the meaning of Article 2(1)(e) of Directive 2003/71/EC (as amended and together with any applicable implementing measures in that member state, the "Prospectus Directive") ("Qualified Investors"); (B) in the United Kingdom, Qualified Investors who are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") and/or high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order; and (C) such other persons as to whom this press release may be lawfully distributed and directed under applicable laws (all such persons in (A) to (C) above together being referred to as "relevant persons").  The shares, or other securities representing shares, or any other securities of the Bank are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons.  Any person who is not a relevant person should not act or rely on this press release or any of its contents.

This press release does not constitute any offer of, or any invitation to sell or issue, or any solicitation of any offer to purchase, subscribe for, underwrite or otherwise acquire any securities of the Bank within the Russian Federation or in favor of the Russian entities or persons. Any foreign securities representing shares of the Bank may not be offered or sold within the Russian Federation, except as provided by the relevant Russian legislation.

The information in this press release or in oral statements of the management of the Bank may include forward-looking statements. Forward-looking statements include all matters that are not historical facts, statements regarding the Bank's intentions, beliefs or current expectations concerning, among other things, the Bank's results of operations, financial condition, liquidity, prospects, growth, targets, strategies, and the industry in which the Bank operates. By their nature, forward-looking statements involve risks and uncertainties, because they relate to events and depend on circumstances that may or may not occur in the future. The Bank cautions you that forward-looking statements are not guarantees of future performance and that its actual results of operations, financial condition and liquidity and the development of the industry in which the Bank operates may differ materially from those made in or suggested by the forward looking statements contained in this press release or in oral statements of the management of the Bank. In addition, even if the Bank's results of operations, financial condition and liquidity and the development of the industry in which the Bank operates are consistent with forward-looking statements contained in this press release or made in oral statements, those results or developments may not be indicative of results or developments in future periods.

Sberbank assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or for any other reason.

The information and opinions contained in this press release or in oral statements of the management of the Bank are provided as at the date of this press release or as at the other date if indicated and are subject to change without notice.

No reliance may be placed for any purpose whatsoever on the information contained in this press release or oral statements of the management of the Bank or on assumptions made as to its completeness.

No representation or warranty, express or implied, is given by the Bank, its subsidiaries or any of their respective advisers, officers, employees or agents, as to the accuracy of the information or opinions or for any loss howsoever arising, directly or indirectly, from any use of this press release or its contents.

This press release is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.

By attending or reviewing this press release, you acknowledge and agree to be bound by the foregoing.

 

 


ISIN:

US80585Y3080, RU0009029540, RU0009029557, US80585Y4070

Category Code:

QRT

TIDM:

SBER

LEI Code:

549300WE6TAF5EEWQS81

Sequence No.:

125384

EQS News ID:

1244203


 

End of Announcement

EQS News Service

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