Turnaround supported by increased operating income, improved asset quality and strong focus on efficiency.

Sberbank Europe Group preliminary IFRS results for YE 2016

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Mag. Linda Michalech
Corporate Communications Manager

Sberbank Europe AG
Tel.: +43 1 22732 1300
Mobile: +43 664 8891 3662
linda.michalech@sberbank.at

Sberbank Europe Group preliminary IFRS results for YE 2016

Sberbank Europe Group: 2016 turnaround, supported by increased operating income, improved asset quality and strong focus on efficiency

“We substantially recovered our net results, we became broadly self-funded and we have further increased our market share in Central and Eastern Europe, adding a significant number of active customers. At the same time, we optimized our operating costs”, comments Gerhard Randa, CEO of Sberbank Europe.

Sberbank Europe’s net profit of EUR 33 million was positively influenced by the one-off effect of the sale of 99.5% stake in Sberbank Slovensko in July 2016. Despite the challenging business environment, characterized by low interest rates, the geopolitical situation and regulatory requirements, Net interest income grew by 17% to EUR 304 m, resulting from the corporate business in Austria as well as group-wide liquidity optimization measures. Net fee and commission income grew by 8% to EUR 81 m. Sberbank Europe’s Net interest margin increased to 2.4%, compared to 2.1% in 2015, on the back of improvement in Austria, Hungary, Czech Republic and Croatia.

As a result of consequent cost efficiency improvements, General administrative expenses decreased by 4% year-on-year, from EUR 287 m to EUR 276 m.

In the first half of 2016, Sberbank Europe significantly strengthened its capital structure by converting EUR 370 m of subordinated loans (Tier 2 capital) into Common Equity Tier 1 capital. Compared to 2015, Sberbank Europe has substantially strengthened its capital position, with a Core Tier 1 capital ratio (CET1) of 15.4% vs. 10.6% as of YE 2015, supported by the sale of the Slovak subsidiary and decrease in Risk-weighted assets. The Bank’s capital position remains robust, supporting its business development and further business growth.

Sberbank Europe continues to improve the quality of its assets. The NPL ratio is decreasing by each quarter and came down to 10% (compared to 11% as of YE 2015) while the NPL coverage ratio grew to 47.7%, from 42.2% as of YE 2015. The improvement of the loan portfolio and the generally stable NPL situation resulted in a decrease in risk costs.

Sberbank Europe grew its active customer base by 11%, from 604 thousand clients at YE 2015 to 673 thousand clients as of YE 2016. The growth of Sberbank Europe’s client base was driven by successful acquisition of retail customers, especially in Serbia and Czech Republic.

Since 2015, the gross loan portfolio has remained flat. Austria and Czech Republic remain two largest markets in terms of loan portfolio and account for approximately 51% of Sberbank Europe Group loans. Driven by buildup of deposits by German branch (Sberbank Direct), Loan/Deposit Ratio improved from 153% to 111% in 2015 and stabilized at 110% as of YE 2016. Sberbank Europe’s funding base remains robust with 71% backed up by client deposits.

As of 31 December 2016, Sberbank Europe Group reports EUR 12,710 m in total assets.

Sberbank Europe aims to serve as a bridge in the region between Russia and Central and Eastern Europe, strengthening the economic and business relations within the countries of Sberbank Group’s presence. Throughout 2017, Sberbank Europe wants to focus on moderate and sustainable growth in both retail and corporate business while continuously strengthening the foundation laid in 2016: being a profitable and efficient banking group, while fulfilling all its customers’ financial needs.

Key financial highlights of Sberbank Europe AG consolidated YE 2016 results*

P&L Highlights

EUR million YE 2016 YE 2015
Net Result after taxes 33 -219
Net Interest Income (NII) 304 260
Net fee and commission income 81 75
Cost/Income Ratio (%) 72.7 89.9
General administrative expenses 276 287
NPL coverage ratio (%) 47.7 42.2

Balance Sheet Highlights

EUR million As of 31.12.2016 As of 31.12.2015
Total net customer loans 8,556 8,492
Total customer deposits 7,774 7,677
Loan/Deposit Ratio (%) 110 111
Core Tier 1 (CET1) ratio (%) 15.4 10.6
Capital Adequacy Ratio (%) 19.0 17.7
NPL ratio 10.0 11.0
Total assets 12,710 14,347

 

Employees (thousand) 4,333 5,108
Branches (hundred) 228 280

* Preliminary consolidated YE 2016 results for Sberbank Europe based on IFRS management accounts


About Sberbank Europe Group

Sberbank Europe Group (Sberbank Europe AG), headquartered in Vienna, Austria, is a banking group that is 100% owned by Sberbank Russia. Sberbank Europe Group is present in nine markets in Central and Eastern Europe (CEE): Austria, Bosnia and Herzegovina, Croatia, Czech Republic, Germany, Hungary, Slovenia, Serbia and Ukraine. In total, the bank operates 228 branches and has 4,333 employees (as of 31.12.2016). Website: www.sberbank.at

About Sberbank Group

Sberbank Russia is Russia’s largest bank and a leading global financial institution. Sberbank holds almost one third of aggregate Russian banking sector assets, it is the key lender to the national economy and the biggest deposit taker in Russia. The Central Bank of the Russian Federation is the founder and principal shareholder of Sberbank owning 50% of the Bank’s authorized capital plus one voting share, with the remaining 50% held by domestic and international investors. Sberbank has almost 140 million individual customers and 1.5 million corporate clients served by 325 thousand employees in over 20 countries. Sberbank has the largest distribution network in Russia with 15,000 branches, and its international operations include UK, US, CIS, Central and Eastern Europe, Turkey and other countries. The bank holds a general banking license No. 1481 issued by the Bank of Russia. Website: www.sberbank.ru

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