Moscow: Russia’s largest bank Sberbank set a new record for quarterly profit in the second quarter of the year, leaving rivals in its wake as its interest margin continued to improve.
State-controlled Sberbank has benefited from its leading industry position during Russia’s economic crisis, with households and companies concerned about the health of weaker lenders moving business to the bank.
Thanks to its huge deposit base, Sberbank has cheaper funding costs which have helped it stay highly profitable, while rivals such as VTB have eked out meagre gains.
Sberbank posted net profit of 145 billion roubles ($2.2 billion) in the second quarter, better than analysts had forecast and than a previous record of 118 billion roubles in the first quarter.
“We expect a slow economic recovery which will allow us to keep our cost of risk under control,” Chief Executive German Gref said in a statement.
Sberbank’s record result comes despite the bank being one of several large Russian state banks under Western sanctions over the Ukraine conflict that limit its access to international capital markets.
It made net interest income of 339 billion roubles in the second quarter, up 49 per cent on the same period of 2015. Its bottom line was also lifted by a 12 billion rouble gain from the sale of the Krasnaya Polyana resort.
Sberbank said its return on equity — a measure of profitability — rose to 22.8 per cent from 10.3 per cent in the second quarter of 2015. Its net interest margin rose to 5.6 per cent from 4.2 per cent.
It took a provision charge for loan impairment of 98 billion roubles, versus 118 billion a year earlier. Net lending fell 3 per cent in the second quarter from the first.
Sberbank’s shares were up 0.4 per cent by 0753 GMT, outperforming the Micex Index which was down 0.5 per cent.
The bank’s management is to hold a conference call at 1400 GMT, at which it is expected to give updated guidance.
