Russia’s largest state-controlled bank Sberbank (Sber) posted 21% year-on-year growth in Russian Accounting Standards (RAS) profit to RUB1.48 trillion ($17bn) in 2023, with RUB116bn RAS profit in December 2023 alone.

As followed by bne IntelliNews, Sberbank posted a RUB357bn ($4.5bn) net profit under IFRS in 1Q23 and RUB737.5bn ($7.9bn) in 1H23. The profit for 1Q23 alone was 1.5 times higher than the bottom line posted for all of 2022, when the bank came under sanctions for Russia's full-scale military invasion of Ukraine.

In 2023, return on equity remained above the long-term average at 24.7% for 2023 and 21.0% in December, Renaissance Capital commented.

Net interest income in December remained at the previous month's level, while fee and commission income increased significantly, offset by higher operating expenses and provisioning. Notably, in December, the growth of retail customer debt slowed to almost zero.

In December, retail debt growth slowed to 0.3% month on month (versus 2.5-2.7% in October-November), while corporate loan growth accelerated to 1.2% m/m (after 0.7-0.9% growth in previous months). 

Overall the loan portfolio grew by 26.3% y/y in 2023. In terms of funding, individuals increased their funds with the bank by 5.7% m/m in December (as per previous reports indicating higher deposits on elevated interest rates), while corporate clients, on the contrary, decreased deposits by 0.9% (after 3.4-4.0% growth in two previous months). At year-end 2023, total retail and corporate deposits grew by 23.8% y/y.

“Given the high asset growth rates, total capital adequacy (N1.0) declined by 1.4 p.p. (up 0.4 p.p. in December) to a still high 13.3% at year-end 2023. The latter will allow the bank to allocate part of 2023 profit to dividend payments,” RenCap believes.

Provided that the IFRS financial result does not differ significantly from the RAS result (in recent quarters the deviation has been insignificant), this would imply a dividend payment of RUB747bn (pay-out ratio was maintained at 50% of IFRS profit) or RUB33.05 per ordinary and preferred share, the analysts estimate.

To remind, Sber, under full blocking sanctions, did not pay the RUB623bn dividend for 2021 amid the fallout from Russia’s full-scale military invasion of Ukraine.

But the bank surprised with the record-breaking total dividend payout of RUB565bn ($7.3bn) in 2022, making more than double the RUB271bn net profit the bank earned last year. The largest recipient of the dividend, at RUB282.5bn, will be the state (50% plus one share in Sberbank).