Sberbank Profit Rises 11% on Consumer, Corporate Lending Growth

OAO Sberbank, Russia’s largest lender, said full-year profit jumped 11 percent as the bank made more loans to consumers and companies.

Net income under Russian accounting standards rose to 344 billion rubles ($11.4 billion) for 2012 from 310 billion rubles for the prior year, the Moscow-based bank said today on its website.

Sberbank, which is controlled by the government, has become Europe’s fourth-largest bank by market value as local lenders and Russia’s economy weather the region’s debt crisis better than their counterparts in western Europe.

“Balance sheet growth was solid as retail deposits surged by 6.4 percent month on month,” Jason Hurwitz and Marina Karapetyan, Alfa Bank analysts in Moscow, wrote in an e-mailed report.

Retail loans expanded 42 percent in the year to 2.52 trillion rubles, while corporate lending increased 17 percent to 7.5 trillion rubles, Sberbank said. Net interest income, the difference between what a bank earns from lending and what it pays on deposits, jumped 23 percent to 638 billion rubles, the lender said.

Non-performing loans dropped 25 basis points to 2.7 percent of total lending at the end of last year. The company said operating expenses climbed 19 percent in 2012 due to costs incurred by the bank’s modernizing plans. A basis point is the equivalent of 0.01 percentage point.

Its capital adequacy ratio, a measure of financial strength calculated by the Russian Central Bank, dropped to 12.5 percent at the end of 2012 from 15 percent a year earlier, a decline Sberbank attributed to last year’s acquisition of Turkey’s Denizbank AS.

Sberbank shares slipped from their highest level since March, losing 0.5 percent to 100.49 rubles by 12.52 p.m. in Moscow trading.

Before it's here, it's on the Bloomberg Terminal.