Sberbank posts jump in full-year net interest income

Sberbank, the Russian Federation's largest lender by assets, posted a big drop in full-year profits in a year marked by the novel coronavirus pandemic.

Commenting on the group's performance, chief executive officer, Herman Gref, emphasised the unprecedented challenges thrown up by the pandemic, including the resulting drop in oil prices and interruptions in certain segments of the Russian economy.

Nevertheless, said Gref: "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."

Gref credited the latter for Sberbank's achievement of a full-year return on equity of 16%, although that was down from 20.5% in 2019.

on an IFRS basis, Sberbank reported a 10% drop in the group's 2020 net profit to reach RUB760.3bn, even as it expanded its loan portfolio in a bid to do its bid to help stem the fallout from Covid-19.

Total gross loans jumped at a year-on-year pace of 15% to reach RUB25trn, with the retail loan portfolio growing by 18% to RUB9.3trn and the corporate loan portfolio expanding by 9.3% to RUB15.7trn.

That drove a 13.6% increase in net interest income to RUB1,608.2bn, but net charges related to asset quality ballooned by 230.3% to -RUB493.8bn.

That was on top of a 344.9% surge in net credit loan loss allowances to -RUB412bn,

Net interest margins on the other hand improved from 5.38% to 5.47% and the lender's cost-to-income ratio from 34.9% to 33.2%.

During the year just finished, Sber also grew its active retail client base by 3m to reach 99m and its corporate client base by more than 200,000 to over 2.7m.