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Financials

UPDATE 5-Russia's Sberbank bets on $14 bln net profit after record quarterly results

* Q2 net profit up 95.1% y/y to $4.44 bln

* Share of non-performing loans decline

* Revenue from non-financial business jumps

* Sberbank sees net profit at around 1 trillion roubles in 2021 (Adds net profit forecast, releads)

MOSCOW, July 29 (Reuters) - Russia’s largest lender Sberbank expects to post around 1 trillion roubles ($13.7 billion) in net profit this year helped by the economic recovery and after it reported strong quarterly results on Thursday, an executive said.

Sberbank made 325.3 billion roubles in net profit in the second quarter, a record quarterly result amid the country’s economic recovery and a sharp cut in provisions against bad loans.

Last year, Sberbank missed its pre-pandemic target of 1 trillion roubles with a 10% decline in profit owing to provisions against bad loans, but maintained its dividend payout.

It now plans to achieve the 1 trillion rouble-profit target this year, Chief Financial Officer Alexandra Buriko told a conference call, citing strong results year-to-date and an overall economic recovery.

Sberbank said on Thursday its net profit jumped 95.1% year on year in April-June, while net interest income rose 10.3% to 439.5 billion roubles, due to high consumer and transactional activity and improved dynamics in corporate lending.

After shrinking 3% in 2020, its sharpest contraction in 11 years, the Russian economy has already recovered to pre-pandemic levels, authorities say. Sberbank expects the Russian economy to expand by 4.2% this year.

Sberbank’s net credit loss allowance charge for debt financial assets, or provisions against bad loans, shrank to 30.2 billion roubles in the second quarter of 2021 from 126.5 billion roubles a year earlier.

Stabilisation of the loan portfolio asset quality helped to significantly reduce the credit risk cost, Buriko said in a separate statement. The share of non-performing loans declined to 6.2% as of end-June from 6.8% at the end of March.

Sberbank’s non-financial business, which includes e-commerce, taxi services, an online cinema and food delivery among others, posted a revenue of 41.1 billion roubles in the second quarter.

In the first six months of 2021, the non-financial business segment generated revenue of 74.7 billion roubles, more than in all of 2020, and the bank expects it to reach over 200 billion roubles for the full year.

“The business dynamics for the first half of the year have formed a solid ground for a more ambitious return on equity forecast of over 22%,” Buriko said. Sberbank sees its corporate portfolio growing by 6% to 8% this year and retail loans expanding by 18-20%. ($1 = 73.1600 roubles) (Reporting by Andrey Ostroukh, Tatiana Voronova and Katya Golubkova; Editing by Anil D’Silva, Mike Harrison, David Evans and Jonathan Oatis)

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