Sberbank Q1 net profit jumps despite sanctions

Bloomberg

Sberbank PJSC reported record first-quarter profit, better than analyst estimates, as provisions and financing costs declined.
Net income rose to 118 billion rubles ($1.8 billion) from 30.6 billion rubles in the first quarter last year, Russia’s biggest lender said in a statement on Wednesday. That was better than the average estimate of 102 billion rubles from six analysts surveyed.
Sberbank has been under US and European Union sanctioned over the Kremlin’s role in the Ukraine conflict since 2014, limiting its access to international capital markets. Russia is facing the longest recession in two decades as the sanctions cut investment and a collapse in the oil price undermined the ruble.
“Sberbank showed a significant net interest margin surge,” Andrey Klapko, a banking analyst at Gazprombank PJSC, said by phone before the report was published. “The main reason is the optimization of financing costs helping to boost profit even as portfolio growth wasn’t very impressive.”
Net interest margin expanded to 5.3 percent in the first quarter from 3.7 percent a year earlier, while the provision charge dropped 27 percent to 83.9 billion rubles.
Sberbank of Russia is a Russian banking and financial services company headquartered in Moscow. Sberbank has operations in several European and post-Soviet countries. As of 2014 it was the largest bank in Russia and Eastern Europe, and the third largest in Europe, ranked 33rd in the world and first in central and Eastern Europe in The Banker’s Top 1000 World Banks ranking.
The majority shareholder of Sberbank is the Central Bank of the Russian Federation. The rest of the shares is dispersed among portfolio, private and other investors with an estimated shareholding of over 43 percent held by foreigners.
As of 2015 the bank had about 16,500 offices with over 250,000 employees. According to own estimates, the bank had over 137 million retail clients and over 1.1 million corporate clients in its 22 countries of presence.
As of August 2015 it accounted for 28.6 percent of aggregate banking assets, calling itself “the circulatory system of the Russian economy”, “key lender to the Russian economy and the biggest receiver of deposits”.