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Sber reports FY2020 Net Profit of RUB760.3 bn under International Financial Reporting Standards (IFRS)
Moscow, March 4, 2021 - Sberbank (hereafter "the Group" or "Sber") released its Annual consolidated IFRS financial statements (hereafter "the Financial Statements") as at and for the 12 months ended 31 December 2020, with audit report by AO PricewaterhouseCoopers Audit.
Herman Gref, Chairman of the Executive Board, CEO:
"A year ago we could hardly imagine the challenges we would encounter in 2020: the pandemic, the drop in oil prices, interruption in operations of certain segments of the economy. In the scope of the joint efforts with the government and businesses, we became an important player in the collective fight against the consequences of the pandemic: we immediately organized an anti-crisis control centre, started offering support to retail clients and businesses from the beginning of the turmoil. During 2020, we issued RUB17.7 trn loans under our own and state programs. We offered our clients different restructuring and financing options to cope with the crisis.
Sber was able to quickly restore the business once the restrictions were lifted. The launch of a massive costs optimization program helped us support profitability, and as a result achieve Return on Equity of 16%.
An important milestone of 2020, was the launch of our new brand, Sber, which is a universe of our financial and non-financial products and services, as well as our new Strategy 2023 that concentrates on building an integrated ecosystem around a client."
FY 2020 Financial and Operational Highlights:
4Q 2020 Financial and Operational Highlights:
Statement of Profit or Loss Results Highlights
Balance Sheet Highlights
Net interest income increased by 13.6% y/y and 15% y/y to RUB1 608.2 bn and RUB426.5 bn for FY 2020 and 4Q 2020 respectively.
Interest income was up by 2.3% y/y in 4Q 2020 to RUB621.7 bn on the back of strong lending volumes.
Interest expenses including deposit insurance expenses decreased by 17.5% y/y in 4Q 2020 to RUB195.2 bn on the back of lower market rates and reduction in deposit insurance contribution.
Net LDR ratio was 90.8% in 4Q 2020, down by 0.4 pp as compared to 3Q 2020.
Securities portfolio increased 1.5 times for 12M 2020, or by 15.3% in 4Q 2020 to exceed RUB6.5 trn, mainly driven by purchases of OFZ with a floating coupon aimed at forming a liquidity buffer without any impact on capital adequacy and negligible effect on interest rate risk.
The Group net fee and commission income increased by 11% y/y and 6.9% y/y to RUB552.6 bn and RUB158.5 bn for FY 2020 and 4Q 2020 respectively mainly on upbeat payments business, the main driver of which were settlement operations, as well as brokerage services.
The combined operating income before provisions of the segment Wealth management and brokerage reached RUB65.8 bn, up by 8.4% for FY 2020. Assets under management increased by 17.3% to RUB1.75 trn.
The combined operating income before provisions of the segment Risk insurance was RUB78.9 bn, down by 2.8% impacted by the pandemic and related restrictions.
The revenues8 of the segment Non-financial business increased 2.7 times to exceed RUB71 bn for FY 2020.
The Group operating expenses were up by 4.9% y/y and 2.0% y/y to RUB759.8 bn and RUB242.7 bn for FY 2020 and 4Q 2020 respectively. Moderate cost growth was facilitated by the launched in 2020 efficiency enhancement program. The increase in staff expenses slowed down to 1.4% y/y (+3.6% y/y for 12M 2020).
The Group Cost-to-Income ratio5 for the financial business improved to 33.2% for FY 2020, down by 1.7 pp y/y.
The combined provision charge including negative revaluation of loans at fair value amounted to RUB484.0 bn and RUB105.9 bn for FY 2020 and 4Q 2020 respectively. The combined Cost of Risk was 206 bp and 171 bp for FY 2020 and 4Q 2020 respectively.
Net credit loss allowance charge for loans at amortized costs amounted to RUB 84.2 bn in 4Q 2020. The Cost of Risk for loans at amortized cost was 139 bp. Negative revaluation of loans accounted at fair value through profit or loss statement due to change in the credit quality amounted to RUB23.9 bn in 4Q 2020.
The credit quality of the loan portfolio improved in 4Q 2020 and returned to the pre-crisis level. The Stage 3 + POCI ratio was 6.6%, down by 33 bp as compared to 3Q 2020, and down by 85 bp for FY 2020.
Total provision coverage of impaired loans was 102.8%, up by 4.3 pp and by 13.4 pp for 4Q 2020 and FY 2020 respectively.
Selected Capital Adequacy Results4
The data in the table is in accordance with standardized and IRB approaches applied to the corresponding assets groups.
Risk-weighted assets under a standardized approach as of 31.12.2020 and 30.09.2020 were assessed according to Basel 3.5 and those for the previous periods were assessed according to Basel III.
Risk-weighted assets under an IRB approach as of 31.09.2020 and 30.09.2020 were assessed according to Basel 3.5 and those for 31.12.2019 were assessed according to Basel III.
Total capital increased by 13.0% to RUB5 008.9 bn for FY 2020. The growth of 3.6% in 4Q 2020 was due to retained earnings and positive revaluation of the securities portfolio.
The Group's risk-weighted assets were up by 4.6% to RUB34 124.2 bn for FY 2020. The growth of 0.4% in 4Q 2020 mostly due to a 5.1% increase in the operating risk component of the risk-weighted assets on the back of the calculation period shift, as well as a 14.9% increase in the market risk related to growth in the investments in securities.
The risk-weighted assets density decreased for the quarter from 92.0% to 90.3% mainly from the growth of the OFZ portfolio that has zero risk-weight. The decrease of 12 pp for FY 2020 was attributed to the implementation of new IRB models, transition to Basel 3.5 and partial release of macro add-ons for retail loans.
The Group's leverage ratio was up by 20 bp to 12.9% in 4Q 2020.
Common equity Tier 1 capital adequacy ratio increased by 44 bp to 13.83% in 4Q 2020. Tier 1 capital adequacy ratio was up by 43 bp to 14.27, while total capital adequacy ratio increased by 46 bp to 14.68%.
1 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
2 Based on profit from continuing operations
3 Before loan loss allowance and including loans at amortized cost and at fair value
4 As per management accounts
5 Other non-interest income / (expense) includes: Net losses from non-derivative financial instruments at fair value through profit or loss (excluding revaluation of loans at fair value due to change in credit quality); 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; Net losses from revaluation of office premises; Impairment of non-financial assets; Net charge for other provisions and allowances (excluding Net loss allowance / provisions for credit related commitments); Revenue of non-core business activities; Cost of sales and other expenses of non-core 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 profit / (loss) of associates / joint ventures; Other net operating (expense) / income
6 Operating income before provisions for debt financial assets. credit related commitments and revaluation of loans at fair value due to change in credit quality
7 Total equity attributable to shareholders of the Bank / Total numbers of shares outstanding (ordinary + preferred)
8 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.
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US80585Y3080, RU0009029540, RU0009029557, US80585Y4070
1.1. Annual financial and audit reports
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