Sber, Russia’s largest lender, achieved a record-breaking net profit in the first half of the year, according to its recent earnings report. The bank reported earnings of 727.8 billion rubles ($8.1 billion), representing a 22.4% increase compared to the same period in 2021.
During this time, Sber’s net interest income surpassed $11 billion, a growth of 41.4% year-on-year. The bank attributed this increase to its business growth in the current year and the favorable impact of a lower base from the previous year. However, Sber did not disclose its earnings dynamics in comparison to 2022, which saw a significant decline of almost 80% due to Western sanctions.
Additionally, the bank experienced a surge in net commission income, which rose by 18.2% year-on-year to $3.6 billion in the first half of the year.
Sber’s profitability was further boosted by the successful sale of its subsidiary in Austria in June, marking its withdrawal from the EU banking market. The net profit generated from this transaction alone amounted to $1.5 billion, setting a new record for the year.
Sber’s CEO, German Gref, expressed optimism about the bank’s future profitability, stating that he expects a steady increase in profits for the rest of the year. He highlighted the stability in yields, indicating that the “cost of risk” has normalized. Gref explained that last year, the bank and others accumulated reserves, resulting in a non-normalized profit this year. He also mentioned the dissolution of a large reserve on the European bank, which was sold, contributing to a higher level of profit.
The Bank of Russia recently revised its earnings forecast for banks in the country, projecting that they will earn over $22 billion by the end of 2023.
Sber’s impressive financial performance demonstrates its resilience and ability to adapt to challenging circumstances. Despite facing significant obstacles in previous years, such as sanctions and volatile market conditions, the bank has managed to rebound and achieve remarkable profits. This not only strengthens Sber’s position as Russia’s leading lender but also contributes to the overall stability and growth of the country’s financial sector.
Overall, Sber’s record-breaking net profit for the first half of 2023 can be attributed to its business growth, favorable base effects, and successful divestment from the EU banking market. With a positive outlook for the remainder of the year, the bank is well-positioned to continue its profitable trajectory and contribute to the Russian economy’s recovery.
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