Skip navigation
Newswire

UPDATE 1-Sberbank posts higher Q3 earnings despite provisions

(Adds details, background)

MOSCOW, Nov 27 (Reuters) - Sberbank, Russia's largest bank, earned 93.8 billion roubles ($2.9 billion) in the third quarter, up 7 percent year-on-year on strong commissions, but made higher-than-expected provisions against doubtful lending.

Russian banks have ramped up retail lending to compensate for weak demand for credit from business, raising concerns that consumer loans could turn sour as the economy slows.

Sberbank, Europe's third largest bank by market value, has unveiled an ambitious strategy to double earnings by 2019 by lending more to consumers at home and developing its existing network of businesses abroad.

However, rising consumer lending, including in credit cards where Sberbank leads the domestic market, loan-loss provisions to quadruple from a year ago to 44 billion roubles in the third quarter, the bank said on Wednesday.

Sberbank said its non-performing loan ratio was little changed at 3.3 percent at the end of September, in line with 3.2 percent at the end of last year.

Its corporate loan portfolio has grown by 8.7 percent in the year to date, while retail loans were up 21 percent. It did not give a quarterly breakdown.

The bank also said it posted 268.3 billion roubles in nine-month net profits, a 2 percent increase year-on-year.

Both results were slightly better than expectations in a Reuters poll of analysts which had called for the bank to earn 92.1 billion roubles in the third quarter and 266.6 billion roubles in the first nine months of the year. ($1 = 32.9502 Russian roubles) (Reporting by Katya Golubkova; Editing by Douglas Busvine)