This report analyses the performance of the Bank for the 3Q2014. You will find all the necessary details regarding volume growth, market share, margin and asset quality development in the Bank.
The key highlights are:
Sberbank's momentum is positive...
Sberbank CZ reported a net profit of CZK 61 mil. in 3Q14 compared to a loss of CZK 13 mil. a year ago. With a 16% yoy growth in revenue, 10% yoy growth in operating profit and a double-digit increase in loans and deposits, the bank's momentum is clearly positive:
Low profitability (ROE remains below 5%) and weak cost efficiency (with a cost to income ratio at above 60%) suggest there is still a long way to go to catch up with the sector average.
A lack of non-interest income generation and relatively high costs are the two single stand-out issues when looking at the bank's income statement.
...as more market share gains are made
Sberbank continues to gain market share. In 3Q2014, the bank grew its loan book 5.7% qoq, or 17.4% yoy, more than three times as fast as the whole market. This could have been inflated by a loan provided to Slovenske Elektrarne, but the trend is clear:
Loan growth is fortunately matched on the deposit side. Funding remains stretched (LDR remains one of the highest), but manageable.
Solid capitalization and asset quality
Following the hefty capital injection in 2Q14, the bank seems to be well-equipped to continue with the aggressive approach seen in the past quarters.
Nor does asset quality seem to be a problem. The share of non-performing loans dropped to 6.4% of total loans at the end of September, the lowest figure within the last six years.
In addition, provision coverage increased to 44% within the quarter from 34%, so the bank seems to be close to the market average in asset quality ratios.
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