Tags: Russia | Crimea | Ukraine | Sberbank

Russia's Sberbank 2013 Profit Growth Misses Target

Thursday, 27 Mar 2014 06:21 AM

Sberbank, Russia's biggest bank, posted a 4.1 percent rise in full-year earnings, falling short of its own target as it increased provisions for loan-losses in a deteriorating economy.

Sberbank CEO German Gref said this week that Russia was at risk of recession as investors pull money out of the country, with growth likely to evaporate if capital outflows rise.

The state-controlled bank's full-year net profit was 362 billion rubles, below its estimate of 370 billion rubles given in August last year as the economy slowed.

Net provision charges for bad loans came to 133.5 billion rubles, most of them for consumer and other loans to individuals, up from 21.5 billion rubles a year earlier.

Banks have been increasing such provisions as the worsening economy makes it harder for companies and individuals to repay loans.

The impact has not yet led to a surge in the proportion of bad loans at Sberbank. The bank said non-performing loans edged down to 2.9 percent of total loans last year compared to 3.2 percent the previous year.

It attributed that improvement to an increase in overall lending which also boosted its bottom line. Like other Russian banks, Sberbank has been piling into high-margin consumer lending as demand for credit slowed at companies.

Capital has fled Russia in recent weeks, with stocks and the ruble sliding following Moscow's seizure of Crimea from Ukraine and western sanctions against Russian individuals. Analysts at Goldman Sachs recently predicted capital outflows for this year could reach $130 billion, or double 2013 levels.

Gref said on Monday there was a risk of recession but Sberbank was not reviewing its business plan in light of that.

He said the bank was not leaving Ukraine, where it has exposure of 130 billion rubles ($4 billion), or less than 1 percent of its balance sheet.

© 2017 Thomson/Reuters. All rights reserved.

 
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Sberbank, Russia's biggest bank, posted a 4.1 percent rise in full-year earnings, falling short of its own target as it increased provisions for loan-losses in a deteriorating economy.
Russia,Crimea,Ukraine,Sberbank
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2014-21-27
Thursday, 27 Mar 2014 06:21 AM
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