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Sberbank’s Q3 results disappoint

January 29, 2008 | RBC

But analysts are more optimistic, saying the bank will report stronger figures soon.

Sberbank disappointed investors on Friday, reporting RUB 69.9 billion (approx. $2.84bn) in net profit for January -September 2007, 6.5 percent less than had been expected. The bank’s stock fell by more than 2 percent on the news. Meanwhile, Sberbank sold RUB 19.436 billion (approx. $790.1m) worth of bonds in October, which will be reflected in Q4 figures, and analysts are generally positive about Sberbank.

On Friday, Sberbank published its interim financial results for the first nine months of last year, in accordance with the International Financial Reporting Standards (IFRS). The bank’s net profit rose to RUB 69.9 billion (approx. $2.84bn), 22.1 percent more than in the corresponding period a year earlier, but 6.5 percent below a consensus forecast of RUB 74.5 billion (approx. $3bn). For the bank itself, this was no surprise. “In accordance with the IFRS, we have to reflect some of next year’s costs in our figures for 2007… to put it accurately, this is between RUB 12 billion and RUB 15 billion (approx. $487.8m to $609.76m),” he said.

“This will weaken the 2007 results, but will mean better figures for 2008,” Alla Aleshkina, former Senior Deputy Chairperson of Sberbank, said in November 2007.

Investors, though, were disappointed, and Sberbank’s shares sank 2.53 percent to $3.85 on the RTS on Friday, closing 2.28 percent lower on the MICEX, at RUB 94.3 ($3.83), while other stocks rallied.

Sberbank’s results are quite neutral, but in the absence of other significant events, the market reacted in such a negative way,” said Leonid Slipchenko, an analyst at Uralsib. “The bank’s Q3 figures are not bad, its net interest, commission and operating revenue are strong enough,” agrees Olga Veselova, at Troika Dialog.

Indeed, Sberbank reported a 59 percent increase in net interest income for the third quarter, to RUB 176.9 billion (approx. $7.19bn), while its commission income climbed 57 percent to RUB 47.3 billion (approx. $1.92bn), and operating revenue was up 53 percent at RUB 225 billion (approx. $9.15bn).

“The market’s reaction is a technical disappointment. On the whole, Sberbank’s report does not reflect the worsening of its position,” believes Natalia Orlova, chief analyst at Alfa Bank. She said investors were concerned with uncertainty about Sberbank’s future management team and its policy. According to Orlova, Sberbank’s stock has potential to grow by 28 percent from its current price levels.

In the fourth quarter, net profit figures should be more positive as Sberbank sold RUB 19.436 billion (approx. $790.1m) worth of bonds in October, which will be reflected in the Q4 report.

Analytical department of RIA RosBusinessConsulting

Company: Sberbank

Full company nameSberbank of Russia
Country of riskRussia
Country of registrationRussia
IndustryBanks

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