MOSCOW (Reuters) -Russia’s largest lender Sberbank’s net profit for the first ten months of the year exceeded 50 billion roubles ($812 million) boosted by a strong performance in October, Chief Executive German Gref said on Thursday.
Like many other Russian banks, Sberbank is under pressure from western sanctions that cut it off from the global financial system shortly after Moscow sent troops to Ukraine in February in what it said was a “special military operation”.
Russian financial authorities have managed to stabilise the situation – yet restrictions, including capital controls, remain and partial mobilisation led to cash outflows from retail accounts in September and October.
Gref, a long-serving Sberbank CEO who had turned the state bank into a semi-technological financial company before the Ukraine crisis, said that in October alone, the bank earned nearly 123 billion roubles profit under Russian Accounting Standards.
He said the quality of the loan portfolio had stabilised and non-performing loan provisions were returning to pre-crisis levels, meaning the bank was well-capitalised and did not need to make use of a relaxation of rules by the central bank designed to support the sector.
By contrast, Andrei Kostin, CEO of state VTB, Russia’s No.2 bank, said on Thursday his bank was using all the help offered because of capital problems and as his bank was making losses.
Sberbank shares were trading at 5.6% and VTB shares were up 3.1% at 1136 GMT, respectively.
Sberbank’s results “are good news allowing us to expect strong financial results in the remaining months and to hope for a dividend payout return,” Promsvyazbank analysts said in a note.
Dividends from Sberbank and VTB are an important source of budget revenues.
Sberbank sees no restrictions on dividend payments in the coming years while VTB would use the bulk of its profit to beef-up the capital, their CEOs have said.
(Reporting by Elena Fabrichnaya; Editing by Clarence Fernandez and Barbara Lewis)