Stage 3 + POCI loans / total gross loans at amortized 6.6% 6.9% 7.5% -- --
Provision coverage of Stage 3 + POCI loans 102.8% 98.4% 89.3% -- --
Net interest income increased by 13.6% y/y and 15% y/y to RUB1 608.2 bn and RUB426.5 bn for FY 2020 and 4Q 2020 respectively.
Interest income was up by 2.3% y/y in 4Q 2020 to RUB621.7 bn on the back of strong lending volumes. ? Retail loan portfolio expanded by 4.8% in 4Q 2020 (+18.1% for 12M 2020) to RUB9.3 trn. The share of retail loans in
the total loan portfolio increased to a record 37.2%. The yield on retail loans declined by 20 bp to 11.6% from the
turnover with loans at lower rates and higher share of mortgages.
? The mortgage portfolio grew by 7.3% in 4Q 2020 (+21.6% for 12M 2020) benefiting from robust demand for both the
state and the bank's own subsidized mortgage programs, which accounted for about 30% of new loan origination.
The securitization of the mortgages portfolio also impacted the dynamics within the portfolio. Excluding the
effect of the securitization transaction the mortgages portfolio would have increased by 8.3%. Our real-estate
platform DomClick makes a substantial contribution to the development of the mortgage lending; the DomClick
monthly audience increased 2.6 times during 2020 to exceed 11 mn users.
? Consumer loan portfolio increased by 2.8% in 4Q 2020 (+16.9% for 12M 2020) on the back of declining market
rates. The share of issuances of consumer unsecured loans via digital channels approached 70% by the end of
? Corporate loan portfolio amounted to RUB15.7 trn, up by 0.2% in 4Q 2020, or up by 3.5% excluding the impact of
FX revaluation4. The portfolio increased by 13.2% for 12M 2020 (9.3% excluding the FX revaluation4). The yield
on corporate loans was down by 50 bp for the quarter to 6.3%. ? Own and state business financing programs were among the factors contributing to the portfolio growth; over RUB420
bn loans were issued under the latter. ? Half of all loans to large and medium size businesses are issued using Loan in 7 minutes technology. The Loan in 3
minutes technology accounts for more than a quarter of loan origination to small businesses.
Interest expenses including deposit insurance expenses decreased by 17.5% y/y in 4Q 2020 to RUB195.2 bn on the back of lower market rates and reduction in deposit insurance contribution. ? Retail funding increased by 5.6% in 4Q 2020 (+7.2% excluding the FX revaluation4) to RUB16.6 trn. The average cost
of retail funding decreased by 30 bp to 3.7% during the quarter. Retail funding growth exceeded 17%for 12M 2020
(+11.8% excluding the FX revaluation4). ? Corporate funding was down by 2.9% in 4Q 2020 to RUB9.1 trn, whereas were up by 3.2% adjusted for FX revaluation4.
The average cost of corporate funding was down by 30 bp to 2.7% during the quarter. Corporate funding increased by
nearly 24% for 12M 2020 (+8.7% excluding the FX revaluation4). ? Total outstanding current account balances were up by 9.6% during 4Q 2020; their share in total deposits increased
to a record 37%.
Net LDR ratio was 90.8% in 4Q 2020, down by 0.4 pp as compared to 3Q 2020.
Securities portfolio increased 1.5 times for 12M 2020, or by 15.3% in 4Q 2020 to exceed RUB6.5 trn, mainly driven by purchases of OFZ with a floating coupon aimed at forming a liquidity buffer without any impact on capital adequacy and negligible effect on interest rate risk.
The Group net fee and commission income increased by 11% y/y and 6.9% y/y to RUB552.6 bn and RUB158.5 bn for FY 2020 and 4Q 2020 respectively mainly on upbeat payments business, the main driver of which were settlement operations, as well as brokerage services.
The combined operating income before provisions of the segment Wealth management and brokerage reached RUB65.8 bn, up by 8.4% for FY 2020. Assets under management increased by 17.3% to RUB1.75 trn.
The combined operating income before provisions of the segment Risk insurance was RUB78.9 bn, down by 2.8% impacted by the pandemic and related restrictions.
The revenues8 of the segment Non-financial business increased 2.7 times to exceed RUB71 bn for FY 2020. ? In 2020 Sber acquired controlling stakes in Sbermarket, a leading e-grocery player, and 2GIS, a leading Russian
geolocating mapping service, as well and consolidated 100% of the Rambler Group and launched its own audio-steaming
The Group operating expenses were up by 4.9% y/y and 2.0% y/y to RUB759.8 bn and RUB242.7 bn for FY 2020 and 4Q 2020 respectively. Moderate cost growth was facilitated by the launched in 2020 efficiency enhancement program. The increase in staff expenses slowed down to 1.4% y/y (+3.6% y/y for 12M 2020).
The Group Cost-to-Income ratio5 for the financial business improved to 33.2% for FY 2020, down by 1.7 pp y/y.
The combined provision charge including negative revaluation of loans at fair value amounted to RUB484.0 bn and RUB105.9 bn for FY 2020 and 4Q 2020 respectively. The combined Cost of Risk was 206 bp and 171 bp for FY 2020 and 4Q 2020 respectively.
Net credit loss allowance charge for loans at amortized costs amounted to RUB 84.2 bn in 4Q 2020. The Cost of Risk for loans at amortized cost was 139 bp. Negative revaluation of loans accounted at fair value through profit or loss statement due to change in the credit quality amounted to RUB23.9 bn in 4Q 2020.
The credit quality of the loan portfolio improved in 4Q 2020 and returned to the pre-crisis level. The Stage 3 + POCI ratio was 6.6%, down by 33 bp as compared to 3Q 2020, and down by 85 bp for FY 2020.
Total provision coverage of impaired loans was 102.8%, up by 4.3 pp and by 13.4 pp for 4Q 2020 and FY 2020 respectively.
Selected Capital Adequacy Results4
The data in the table is in accordance with standardized and IRB approaches applied to the corresponding assets groups.
Risk-weighted assets under a standardized approach as of 31.12.2020 and 30.09.2020 were assessed according to Basel 3.5 and those for the previous periods were assessed according to Basel III.
Risk-weighted assets under an IRB approach as of 31.09.2020 and 30.09.2020 were assessed according to Basel 3.5 and those for 31.12.2019 were assessed according to Basel III.
31.12.2020 / 31.12.2020 /
Under Basel III
31.12.2020 30.09.2020 31.12.2019 30.09.2020 31.12.2019
RUB bn. unless stated otherwise
% change % change
Common equity Tier 1 capital 4 719.9 4 554.8 4 375.4 3.6% 7.9%
Tier 1 capital 4 869.9 4 704.8 4 375.4 3.5% 11.3%
Total capital 5 008.9 4 836.4 4 433.5 3.6% 13.0%
Risk-weighted assets 34 124.2 34 004.7 32 634.1 0.4% 4.6%
Credit risk 29 253.9 29 468.4 28 062.7 -0.7% 4.2%
Operational risk 3 664.3 3 486.8 3 486.8 5.1% 5.1%
Market risk 1 206.0 1 049.5 1 084.6 14.9% 11.2%
Common equity Tier 1 capital adequacy ratio 13.83% 13.39% 13.41% -- --
Tier 1 capital adequacy ratio 14.27% 13.84% 13.41%
Total capital adequacy ratio 14.68% 14.22% 13.59% -- --
Leverage ratio 12.9% 12.7% 13.7% -- --
Total capital increased by 13.0% to RUB5 008.9 bn for FY 2020. The growth of 3.6% in 4Q 2020 was due to retained earnings and positive revaluation of the securities portfolio.
The Group's risk-weighted assets were up by 4.6% to RUB34 124.2 bn for FY 2020. The growth of 0.4% in 4Q 2020 mostly due to a 5.1% increase in the operating risk component of the risk-weighted assets on the back of the calculation period shift, as well as a 14.9% increase in the market risk related to growth in the investments in securities.
The risk-weighted assets density decreased for the quarter from 92.0% to 90.3% mainly from the growth of the OFZ portfolio that has zero risk-weight. The decrease of 12 pp for FY 2020 was attributed to the implementation of new IRB models, transition to Basel 3.5 and partial release of macro add-ons for retail loans.
The Group's leverage ratio was up by 20 bp to 12.9% in 4Q 2020.
Common equity Tier 1 capital adequacy ratio increased by 44 bp to 13.83% in 4Q 2020. Tier 1 capital adequacy ratio was up by 43 bp to 14.27, while total capital adequacy ratio increased by 46 bp to 14.68%.
1 Excluding the subordinated loan agreement in the amount of RUB150.0 bn classified as equity financial instrument that was previously ceded by the Bank of Russia in favor of the Ministry of Finance
2 Based on profit from continuing operations
3 Before loan loss allowance and including loans at amortized cost and at fair value
4 As per management accounts
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