Sberbank — Earnings Release 2017

Dec 7, 2017

Sberbank (SBER)

07-Dec-2017 / 08:08 CET/CEST Dissemination of a RegulatoryAnnouncement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. The issuer / publisher is solely responsible for the content of this announcement.

Sberbank releases FinancialHighlights for 11M 2017 (underRAS; non-consolidated)

Please note that the numbers are calculated in accordance with Sberbank's internal methodology. There were some amendments to the methodologyfrom January 1, 2017 and the numbers for 2016 were restated in accordance with the new methodology for comparability purposes.

December 7, 2017

Key highlights forNovember:

• InNovember, the Bank earned net profit ofRUB64.3 bn;
• Client funds increased byRUB113 bn or 0.7%in realterms inNovember;
• Theamount of retailloans issued inNovember hitarecord of about RUB240 bn and over RUB1 trlnwere granted to corporateclients;
• The Bank reduced client overdue debt inNovember byRUB14.4 bn.

DeputyChairman ofSberbankAlexander Morozov stated:

"In November, the Bank issued a historical record of retail loans - around RUB240 bn - and posted a decent growth of corporate loan portfolio on the back of loan qualityenhancement. The Bank also saw inflows of client funds both in corporate and retail segments as well as growth in net fee and commission income by morethan 15%."

Comments for 11M 2017:

Net interest income increased by 7.9%compared to 11M2016 and came at RUB1.1 trln. The increase was dueto such factorsas lower rates on client fundsand expansion of retailloan portfolio.

Net fee and commission income was up by 15.6% to RUB320 bn, driven largely by operations with bank cards and bank insurance, which both grewby 28%ascompared to 11M2016.

Operating income before provisions increased by 15.5%compared to 11M2016, which outpaced operating expenses for the same period by a significant margin of 9.6 p.p. Growth in operating expenses by 5.9% was due to introduction of accrual approach to spread costs more evenly through the year starting from2017 in addition to wage indexation. Excluding payrollcosts, operating expenses fell 1.0% or RUB1.8 bn as compared to 11M2016,ascost reductionmeasures implemented by the Bank took effect. Cost-to-Incomeratio stood at 30.2% for 11M2017, an improvement of 2.7 p.p.ascompared to 11M2016.

Provision charges totaled RUB19.7 bn inNovemberand amounted to RUB281 bn for 11M2017, which is 4.7% higher in comparison with 11M 2016. As of December 1, 2017, loan-loss provisions were 2.7 times overdueloans.

Net profit before income tax cameat RUB780 bn. Net profit totaled RUB624 bn, includingRUB64.3 bn inNovember.

Total assets increased by 0.7% in nominal terms and by 0.4% in real terms and exceeded RUB22.7 trln inNovember, driven mainly by customer loan portfolio expansion.

The Bank granted over RUB1 trln in loans to corporate clients inNovember or total over RUB9.6 trln fromthe beginning of the year, which is 22% higher than in 11M 2016. Corporate loan portfolio increased by 1.7% in nominal terms and by 1.3% in real terms. The outstanding balance exceeded RUB12.1 trln.

The Bank set a new record in November by granting almost RUB240 bn in loans to retail clients. The previous records were overcome both in mortgage loans and consumer loans. Totalamount of retail loans granted for 11M 2017 was RUB1.9 trln, or 35% more than in 11M 2016. Retail loan portfolio expanded 2.0%to RUB4.84 trln.

Regular work with problemloans helped the Bank to reduce its overdue exposure byRUB14.4 bn in November. The share of overdue loans as percentage of total portfolio reduced in November by 0.1 p.p. to 2.6%. The indicator is substantially lower than the sectoraverage (8.7% excl. Sberbank as of November 1, 2017).

Securities portfolio remained virtually unchanged inNovember - a slight increase of 0.4% - at RUB2.46 trln as of December 1. The portfolio consists of government securities, including those issued by the Bank of Russia, that represent 54% and corporate bonds that represent 37% of the total portfolio.

Customer deposits and accounts increased in November by 1.0% in nominal terms and by 0.7% in real terms. Growth spanned acrossall the corporate segments (+1.4% in real terms) as well as retail depositors (+0.3% in real terms). As of December 1, the balance of client funds amounted to RUB17.2 trln and accounted for 89%ofliabilities.

Common EquityTier 1 and Tier 1 capital (equal since Sberbank does not have instruments of additional capital) reached RUB2,658 bn as of December 1, 2017 under preliminary calculations.

Totalcapitalamounted to RUB3,653 bn for this date, with retained earnings being the main source of capitalincrease.

Risk-weighted assetsadded RUB289 bn inNovember to RUB24.8 trln, whichwas mainly dueto loan portfolio.

Capitaladequacy ratiosas of December 1, 2017 under preliminary calculations were:

• N1.1 10.8%(minimumadequacy level, required by the CentralBank ofRussiaat 4.5%)
• N1.2 10.8%(minimumadequacy level, required by the CentralBank ofRussia at 6.0%)
• N1.0 14.8%(minimumadequacy level, required by the CentralBank ofRussia at 8.0%).

Sberbank 11M2017 FinancialHighlights (under RAS, non-consolidated)

ISIN: US80585Y3080, RU0009029540, RU0009029557, US80585Y4070 Category Code:MSCM TIDM: SBER LEICode: 549300WE6TAF5EEWQS81 Sequence No.: 4956

End ofAnnouncementEQS News Service