Economic woes and Ukraine crisis drag down Sberbank earnings 24pc
Ukraine crisis clouds outlook of Russian lender as loan loss provisions double
An economic slowdown, losses in Ukraine and a weaker rouble reduced third-quarter profits by 24 per cent at Sberbank, Russia's biggest bank, as provisions for loan losses more than doubled.
Russia's economy is showing signs of strain as Western sanctions over the Ukraine crisis and tumbling oil prices depress growth.
Sberbank is one of several state-controlled banks to be made the subject of sanctions that limit access to international capital markets, thereby driving up the cost of financing. Like other big Russian banks, its Ukrainian units are losing money.
The bank said net profit declined to 70.9 billion roubles (HK$12.1 billion) in the third quarter from a year earlier. Analysts said they expected the final quarter to bring further high loan loss provisions.
"A deterioration of the prospects for economic growth and a slowing in the growth of incomes of the population were key factors worsening the quality of [our] retail portfolio," Sberbank said.
The bank said it had set aside 104.5 billion roubles in provisions for loan losses, more than twice the amount it had set aside a year earlier, and the slide in the rouble had made it harder for clients to repay loans Sberbank had issued in foreign currency.
