Sberbank releases Financial Highlights for January 2011 (under RAS; non-consolidated)

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Please note that the data are prepared in accordance with

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.  Also note that the numbers as of 1 January 2011 exclude the effect of events occurring after the balance sheet date.

11 February 2011

Income Statement Highlightsfor January 2011 (as compared to January 2010)

• Net interest income increased by 0.6% y-o-y

• Net fee and commission income grew 17.0% y-o-y

• Provision charge amounted to RUB5.0 bn vs. RUB20.0 bn for January 2010

• Operating income before provisions increased by 11.8% y-o-y

• Operating income after provisions grew 1.9 times y-o-y

• Operating expenses were up by 26.5% y-o-y

• Profit before tax amounted to RUB29.4 bn vs. RUB12.1 bn for January 2010

• Net profit totaled RUB26.7 bn vs. RUB11.7 bn for January 2010 

Net interest incomeincreased by 0.6% y-o-y in January 2011. Higher income earned on retail loans (+16.1% y-o-y) and on investment portfolio (+17.2% y-o-y) along with reduced interest expense (-15.7% y-o-y) offset the decline in income from lending to corporate customers (-16.6% y-o-y). Given that market rates on corporate loans fell significantly from a year ago, the Bank’s revenue growth in the corporate segment was limited notwithstanding a robust expansion of the loan book.

Net fee and commission

incomewas up 17.0% y-o-y, with growth stemming from almost all fee-generating services and operations.

Operating income before provisionsgrew 11.8% y-o-y, supported by customer lending, transactions on financial markets (reflecting specifics of Russian accounting for derivatives) and increased fees and commissions.

Operating expensesrose by 26.5% y-o-y, mainly due to higher staff costs which increased in line with planned wage adjustments. Cost to income ratio stood at 27.9%.

The Bank allocated RUB5.0 bn inprovisionsin January 2011 as compared with RUB20.0 bn a year ago. The decrease was led primarily by smaller provisions for loan impairments.

Operating income after provisionsincreased 1.9 times y-o-y.Profit before taxwas RUB29.4 bn andnet profittotaled RUB26.7 bn. Both numbers came in twice higher those for January 2010.

The

balance sheet

shrank 2.4% to RUB8,344 bn in January 2011. On the liabilities side, the decline owed to lower corporate term accounts and retail deposits. The squeeze in assets was mainly due to reductions in liquid assets like cash and equivalents, amounts due from foreign banks and correspondent accounts with other banks.

Corporate loan bookincreased by 1.1% m-o-m to RUB4,820 bn. The Bank granted more than RUB270bn loans to Russian companies in January 2011, which is 30% more than a year ago. Momentum built up inretail lending,with the loan bookexpanding 0.5% m-o-m to RUB1,309 bn.

Credit quality of the loan portfolioimproved in January: The overdue loans decreased from 5.04% to 5.00% of total. As of 1 February 2011,loan-loss provisionsamounted to RUB671 bn, or 2.2 times overdue loans, i.e. coverage ratio remained high.

Investment portfoliowas virtually unchanged in January. As of 1 February 2011, the balance stood at RUB1,738 bn and the structure was dominated by government bonds (66% of total).

After the solid funds inflow in December,retail depositsdeclined 2.2% m-o-m to RUB4,705 bn in January, which is a typical pattern for the beginning of the year.Corporate accounts and depositsalso saw seasonality, falling 5.7% m-o-m to RUB1,759 bn.

Regulatory capital(under CBR regulation No. 215-P) increased by RUB19.7 bn in January to RUB1,271 bn. Part of net profit was the main source of incremental capital. It was transferred to supplementary capital, in the amount not exceeding the core capital, conforming to the capital calculation.Capital adequacy ratiostood at 18% as of 1 January 2011.

target="_blank">Sberbank’s Financial Highlights for January 2011

News Source : Sberbank releases Financial Highlights for January 2011 (under RAS; non-consolidated)