Sberbank's Q3 profits rebound, hinting at revised 2023 ROE forecast

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Sberbank's Q3 profits rebound, hinting at revised 2023 ROE forecast
Credit: © Reuters.

Sberbank, the leading bank in Russia, has reported a robust Q3 net profit of 411.4 billion roubles ($4.41 billion), marking a significant increase from Q2's 380.3 billion roubles. This brings the total to 1.15 trillion rubles for the first nine months of the year, under International Financial Reporting Standards (IFRS).

The bank also experienced a surge in retail and corporate loans during this period. Retail loans rose by 22.1% to reach 15.179 trillion rubles, while corporate loans saw an increase of 21.9%, amounting to 22.676 trillion rubles. Concurrently, retail deposits swelled by 15.7% to 21.409 trillion rubles, and corporate deposits climbed by 18.1% to hit 13.432 trillion rubles.

Despite facing economic challenges due to the central bank's order to limit disclosures following Russia's military action in Ukraine, Sberbank demonstrated resilience with its net interest margin climbing to 6%. This improvement was attributed to the Bank of Russia's rate hikes totaling 750 basis points since July.

The bank's net interest income also rose in Q3, reaching 667.9 billion roubles due to an increase in working assets and improved margins. Meanwhile, costs for reserves and loan reassessment were reported at 48 billion rubles for Q3 and totaled 234.9 billion rubles for the January-September period.

Sberbank's successful rebound from a challenging 2022 has led CEO German Gref to hint at an upward revision of the bank's 2023 Return on Equity (ROE) forecast, which is currently pegged above 24%. This comes on the back of strong performance indications and a Q3 ROE of 27.6%.

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