Dominant Russian lender Sberbanks profits rise 9.8% y/y in Jan

Dominant Russian lender Sberbank's profits rise 9.8% y/y in Jan

By Alexander Marrow

MOSCOW (Reuters) – Russias largest lender Sberbank said on Thursday its January net profit rose 9.8% year-on-year to 110.1 billion roubles ($1.51 billion), due to restrained growth in expenses and the stable quality of its loan portfolio.

Smarting from the blow of sweeping Western sanctions, including a ban from the SWIFT international payments network, and forced to shutter most of its European operations, Sberbanks full-year profits dropped almost 76% in 2022.

The bank, which serves nearly 107 million retail clients, returned to profitability in the latter half of the year, increasing its capital and capital adequacy and seeing growth in several areas of its business.

“Net interest income rose 16.4% in January to 173.8 billion roubles on the back of an increase in the share of retail loans and a reduction in the share of foreign currency assets in the performing assets structure,” Sberbank said, reporting to Russian accounting standards.

Russian banks‘ foreign currency loan portfolios shrank by 18.2% in 2022, the central bank said last month, or by $30.2 billion, as Moscow intensified efforts to reduce exposure to the U.S. dollar and other so-called ’unfriendly currencies.

The banks retail loan portfolio expanded by 1% in January, primarily due to mortgage lending and credit cards, while the corporate credit portfolio dropped by 0.9%, driven by loan repayments by several large borrowers.

Sberbank‘s share of the credit card market stood at 46.3% as of Jan. 1, up 2.5 percentage points in 2022, underscoring the lender’s dominance of the Russian banking sector and its fundamental importance to the economy.

Russian banks stopped reporting financial results soon after Russia sent troops into Ukraine last year and Sberbank only restarted in a basic form in November. No. 2 lender VTB, which blamed all its 2022 losses on sanctions, has disclosed little.

“The cost of risk approached a normalised level of 1.1% in January,” Sberbank said.

Net fee and commission income rose by 14.9% in January to 45.6 billion roubles, the bank said.

($1 = 73.0000 roubles)

(Reporting by Alexander Marrow; Editing by Kim Coghill)

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