The largest Russian lender, Sberbank, today reported a four percent decrease in profit for the first quarter of this year compared to the same period last year, primarily due to increased provisions for bad loans.
Net profit for the first three months amounted to 88.5 billion Russian rubles (2.8 billion dollars), compared to 92.2 billion rubles achieved in the same period last year, according to the business report.
The bank attributes this result to heightened allocations for potential losses on bad loans. In the first quarter of this year, provisions amounted to 31.8 billion rubles, compared to 10.9 billion rubles in the previous quarter. In the first three months of last year, the bank recorded a reversal of provisions amounting to 3.2 billion rubles, as stated in the business report.
The share of non-performing loans in the loan portfolio slightly increased compared to the previous three months, from 3.2 to 3.3 percent, but decreased compared to the same period last year when it was 4.8 percent, the report shows.
Sberbank, which accounts for one-third of total lending activities in Russia, announced that its lending to legal entities, most of which consists of corporate loans, has increased by 0.9 percent since the beginning of the year. Lending to individuals has simultaneously increased by 2.6 percent.
The Tier 1 capital adequacy ratio in the first quarter increased to 10.9 percent, up from 10.4 percent at the end of 2012, among other things stated in the quarterly business results report published today.
