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Business & Finance

Sberbank posts record quarterly profit, cuts provisions

  • Q2 net profit up 95.1% y/y to $4.44 bln.
  • Share of non-performing loans decline.
  • Revenue from non-financial business jumps.
  • Sberbank shares up in line with broader market.
Published July 29, 2021
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MOSCOW: Russia's largest lender Sberbank made 325.3 billion roubles ($4.44 billion) in net profit in the second quarter, a record quarterly result amid the country's economic recovery and a sharp cut in provisions against bad loans.

Last year, Sberbank missed its pre-pandemic target with a 10% decline in net profit owing to provisions against bad loans, but it pledged to maintain its dividend payout and promised a "significant" rise in 2021 profit.

Sberbank said on Thursday its net profit jumped 95.1% year on year in April-June, while net interest income rose 10.3% to 439.5 billion roubles.

"In the second quarter we saw high consumer and transactional activity and improved dynamics in corporate lending," Chief Financial Officer Alexandra Buriko said in a statement.

Russia's Sberbank lowers 2021 cost of risk forecast

The results also reflect the rapid economic recovery in Russia, she said.

Sberbank shares were up 0.3% at 303.8 roubles, slightly underperforming the benchmark MOEX index that gained 0.4% as of 1200 GMT.

After shrinking 3% in 2020, its sharpest contraction in 11 years, the Russian economy has already recovered to pre-pandemic levels, authorities say.

Sberbank's net credit loss allowance charge for debt financial assets, or provisions against bad loans, shrank to 30.2 billion roubles in the second quarter of 2021 from 126.5 billion roubles a year earlier.

Stabilisation of the loan portfolio asset quality helped to significantly reduce the credit risk cost, Buriko said.

The share of non-performing loans declined to 6.2% as of end -June from 6.8% at the end of March, the bank's results under the International Financial Reporting Standards showed.

IMF raises Russia's 2021 economic growth forecast

Sberbank's non-financial business, which includes e-commerce, taxi services, a online cinema and food delivery among others, posted a revenue of 41.1 billion roubles in the second quarter.

In the first six months of 2021, the non-financial business segment generated revenue of 74.7 billion roubles, more than in the entire 2020.

"The business dynamics for the first half of the year have formed a solid ground for a more ambitious return on equity forecast of over 22%," Buriko said.

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