Moscow Russia’s dominant bank Sberbank announced a nearly 80% drop in 2022 net profit on Thursday. sweeping Western sanctions Russia’s financial sector has been rattled in what the bank’s chief executive called “the toughest year”.
Sberbank (sbrcy) The results were released under international reporting standards for the first time in a year. Russian authorities ordered banks to limit disclosures and dividend payments last year as Moscow tried to maintain financial stability.
Sberbank’s annual profit amounted to 270.5 billion rubles ($3.57 billion), down 78.3 percent from 2021 and about 30 billion rubles ($396 million) less than it was announced in 2022 under Russian accounting standards.
Chief Executive German Gref said this year’s profit should come close to the record 1.25 trillion rubles ($16.5 billion) achieved in the “pre-crisis year”.
“Our business model has passed another strength test,” Greif said, adding that the bank will now resume consideration of dividend payments for its 2022 results, with a decision due in March.
Russia’s Finance Ministry expects the state-owned lender to pay 50% of its earnings for 2022 as dividends.
A plan to face the crisis
Sberbank’s resilience in the face of sanctions helped the Russian banking sector recover from a losing first half of 2022.
Other lenders, such as Bank No. 2 VTB, have not fared so well, and Russia’s central bank warned of “systemic risks” to the sector last week as lenders scramble to book profits.
Banks are now jostling for business from the state – especially with the defense budget ballooning – and the country’s big business.
“We implemented a plan to confront the crisis: we radically revised our priorities, introduced the most stringent savings measures, closed and sold international companies, and also made all the necessary provisions for a frozen portfolio of loans and assets,” Gref said.
Sberbank said savings exceeded 240 billion rubles ($3.2 billion), with operating costs down 1.5% year-on-year. Greif said the bank had recovered $6 billion in foreign currency from abroad since the sanctions were imposed.
