Sberbank Quarterly Net Jumps 10-Fold as Lending Grows

OAO Sberbank, Russia’s biggest lender, increased third-quarter profit more than 10-fold as it boosted lending and decreased the share of bad loans. Shares rose, heading toward a three-year high.

Net income attributable to shareholders rose to 45.8 billion rubles ($1.46 billion) from 4.25 billion a year earlier, the Russian lender said today on its website. That beat an average estimate of 36.3 billion rubles from 10 analysts surveyed by Bloomberg.

Russian bank lending to individuals has increased for eight straight months, while loans to companies have climbed for seven, according to central bank data. Demand for financing began to recover this year, after the economy shrank 7.9 percent in 2009, the most on record since the Soviet Union collapsed.

“We believe that the results suggest positive earnings trends in the medium term,” Jason Hurwitz and Leyla Sharifullina, analysts at Alfa Bank in Moscow, said in a note.

Shares gained 1 percent to 104 rubles at 3:04 p.m. in Moscow, heading for the highest close in almost three years.

The share of bad loans fell to 8.6 percent from 9.1 percent in the second quarter, the bank said. That allowed the lender to decrease reserves as a proportion of outstanding loans to 12.2 percent from 12.5 percent.

Loan Provisions

Sberbank set aside 150 billion rubles as provisions for bad loans in the first nine months, a 50 percent decrease from the same period last year, the lender said. Nine-month profit was 109.9 billion rubles.

Corporate loans jumped 8.9 percent in the third quarter from the previous three months to 4.6 trillion rubles, Sberbank said. Loans to individuals increased 3.9 percent to 1.26 trillion rubles in the same period.

The net interest margin fell to 6.1 percent from 6.3 percent in the second quarter after net interest income fell 1 percent 116.7 billion rubles in the same period due to “lower interest rates on corporate loans on the market as well as higher competition in attracting quality clientele,” according to the statement. Net interest income fell 11 percent from a year earlier, the bank said.

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