Azernews.Az

By Bloomberg

OAO Sberbank said first-quarter profit slid 58 percent, while still coming in better than estimated, as Russia’s biggest lender increased provisions for bad loans.

Net income dropped to 30.6 billion rubles ($584 million) from 73.4 billion rubles a year earlier, the Moscow-based bank said in a statement on its website on Thursday. That compares with the 22.3 billion-ruble estimate of 11 analysts polled by Bloomberg. Net provisioning for loan impairments increased to 115 billion rubles from 77.1 billion rubles.

Russian lenders’ profits have been squeezed by high interest rates while a plunge in crude oil, the nation’s biggest export revenue earner, exacerbates the impact of sanctions over the Ukraine conflict. U.S. and European measures are shutting Russian banks out of markets in other parts of the world including Asia, Sberbank Deputy Chief Executive Officer Alexander Morozov said Wednesday.

“Sberbank remains a proxy to economic sentiment and the stock continues to be driven by the ruble,” Natalia Berezina, banking analyst at UralSib Financial Corp., wrote in an e-mailed report before the earnings were published. “As we see upside risks for the economy, but some room for ruble depreciation later this year, the stock price could be volatile.”

Sberbank’s shares climbed 0.4 percent to 74.51 rubles by 10:47 a.m. in Moscow.

Net interest income, the difference between what a bank earns from lending and what it pays on deposits, dropped to 200 billion rubles from 240 billion rubles last year.

Non-performing loans increased to 3.9 percent of total lending at the end of March from 3.2 percent at the end of last year.

Sberbank’s Tier 1 capital adequacy ratio, a measure of financial strength, climbed to 9 percent from 8.6 percent at the start of the year. Total capital adequacy ratio under Basel I rules gained to 12.7 percent from 12.1 percent.