Moscow: Sberbank PJSC’s second-quarter profit slid 44 per cent as Russia’s biggest lender increased provisions for loan losses.
Net attributable income dropped to 54.2 billion roubles (Dh2.89 billion; $786 million) from 97.6 billion roubles a year earlier, the Moscow-based bank said in a statement on its website Wednesday. Eight analysts surveyed by Bloomberg estimated 41.8 billion roubles on average.
Russia is in its first recession since 2009, squeezing lenders’ profits. High interest rates and the sharp decline of crude, the nation’s biggest export revenue earner, have exacerbated the impact of sanctions on Sberbank over the Ukraine conflict.
“The globally deteriorating environment, especially the falling oil price, implies downside risks for Sberbank as a proxy to the Russian economy,” Natalia Berezina, a banking analyst at UralSib Financial Corp., said in an emailed report before the earnings were published.
Sberbank increased loan-loss provisions to 117.1 billion roubles in the second quarter from 73.8 billion roubles a year ago as non-performing loans increased to 4.9 per cent of total lending in the first half from 3.4 per cent at the end of June 2014.
Sberbank’s common shares fell 0.7 per cent to 70.27 roubles by 11:43am in Moscow. Micex Index of Russian stocks fell 0.6 per cent.
Net interest income, the difference between what a bank earns from lending and what it pays on deposits, dropped to 227 billion roubles in the second quarter from 250 billion roubles a year earlier.
Sberbank’s Tier 1 capital adequacy ratio, a measure of financial strength, climbed to 9.6 per cent from 8.6 per cent at the start of the year. Total capital adequacy ratio under Basel I rules grew to 13.4 per cent from 12.1 per cent.