Top Russian lender clocks up record profits amid Western sanctions
Russia's largest lender, Sber, collected a record net profit in January-June this year, the bank said in its earnings report on Tuesday.
According to the data, the bank earned 727.8 billion rubles ($8.1 billion) in the first half of 2023. Earnings surged by 22.4% compared to the same period of 2021, which was a record year for the bank.
During the reporting period, Sber’s net interest income exceeded $11 billion. The figure grew 41.4% year-on-year due to “business growth in the current year, as well as the effect of the low base of the previous year,” the bank said. Sber has not disclosed its earnings dynamics in comparison to 2022, when its profits slumped almost 80% amid the Western sanctions.
Sber's net commission income also surged in the first half of the year, gaining 18.2% year-on-year to $3.6 billion.
The lender greatly profited from the June sale of its subsidiary in Austria, which finalized its withdrawal from the EU banking market. Sber initially announced its plans to divest from the bloc last year, due to sanctions over Russia's military operation in Ukraine. Thanks to the sale, the net profit of the lender in June alone amounted to $1.5 billion, a record high for the year.
Last week, Sber CEO German Gref said he expects a steady increase in the bank’s profits this year.
“The fact that yields are returning to a normal level, it shows that the ‘cost of risk’ has stabilized. This year the non-normalized profit will be somewhat higher, because last year everyone accumulated reserves, Sber among them…
“We have now dissolved a large reserve on our European bank, which we sold. Last year we lost in return on equity, this year we are going to have this kind of a one-off profit, a higher level of profit due to the dissolution of reserves,” Gref stated on the sidelines of the Russian central bank’s FINOPOLIS forum.
Last month, the Bank of Russia upgraded its 2023 earnings forecast for banks in the country, projecting they will earn upwards of $22 billion by the end of the year.
For more stories on economy & finance visit RT's business section
