Sberbank misses profit expectations
Sberbank, Russia’s biggest lender, missed its forecast for its third quarter net profit but analysts took heart from slowing bad loan growth which they said could pave the way for a stronger performance in the coming months.
The state-run bank posted a net profit of 4.2bn roubles (£87.4m) in January-September, undershooting analysts’ forecasts of 5.1bn roubles, as provisions for bad loans rose by more than expected.
But the rate of growth in non-performing loans fell in the third quarter to 1.5 percentage points from 2.9 points in the second, Sberbank said.
Russia’s banks have been hit hard by a recession, which has left an increasing number of debtors unable to repay loans.
But recent newsflow points to some improvement in both the broader economy and the financial sector.
Sberbank increased provisions by 105.8bn roubles, or 27 per cent, to 493.8bn roubles while the share of non-performing loans rose to 7.9 per cent of its total loan portfolio from 6.4 per cent in the second quarter.
The coverage ratio of provisions to the loan book reached 8.9 per cent compared with 3.8 per cent at the beginning of the reporting period, the bank said.