Sberbank Europe AG, Russia’s largest lender, announced a 9.8% increase in its January net profit, reaching 110.1 billion roubles ($1.51 billion). The bank attributes the growth to a rise in net interest income and a stable loan portfolio. Despite being hit hard by Western sanctions and being forced to close most of its European operations, Sberbank saw a return to profitability in the latter half of 2022.
The bank’s retail loan portfolio expanded by 1% in January, primarily due to mortgage lending and credit cards, while the corporate credit portfolio dropped by 0.9% due to loan repayments by several large borrowers. Sberbank’s share of the credit card market rose 2.5 percentage points in 2022, reaching 46.3% as of January 1st.
Sberbank Europe AG reports rise in net profit which account for 16.4% increase in net interest income to 173.8 billion roubles, attributed to a rise in retail loans and a reduction in the share of foreign currency assets in the performing assets structure. The cost of risk approached a normalized level of 1.1% in January, the bank stated. Additionally, net fee and commission income rose by 14.9% to 45.6 billion roubles.
The central bank reported a 18.2% decrease in Russian banks’ foreign currency loan portfolios in 2022, or a $30.2 billion decrease, as Moscow works to reduce its exposure to the US dollar and other “unfriendly” currencies.
After Russia’s intervention in Ukraine last year, Russian banks stopped reporting financial results. Sberbank only restarted in a basic form in November, while VTB, the country’s second largest lender, blamed all its 2022 losses on sanctions and has disclosed little.
Despite facing challenges, Sberbank Europe AG reports rise in net profit in these situations and still remains a key player in the Russian banking sector and a fundamental part of the country’s economy. The bank’s January net profit increase serves as a positive sign for the future.