Russia’s Sberbank makes record $16bn profit in 2023

Russia’s Sberbank makes record $16bn profit in 2023
Russia’s Sberbank makes record $16bn profit in 2023 / bne IntelliNews
By bne IntelliNews February 28, 2024

Russia’s largest state-controlled bank Sberbank (Sber) posted 5.5-fold year-on-year net IFRS profit jump to a record-high of RUB1.5 trillion ($16.3bn) and made a return on equity (ROE) of 25.3%. Compared to 2021, prior to the full-scale military invasion of Ukraine, Sber’s net profit increased by 21%. 

For context, Sber  subject to full-blocking sanctions  did not pay the RUB623bn dividend for 2021 amid the fallout from Russia’s military invasion of Ukraine. But the bank surprised with the record-breaking total dividend payout of RUB565bn ($7.3bn) in 2022, making more than double the RUB271bn net profit the bank earned last year. 

Previously Sber has confirmed that it will pay 50% of IFRS net profit in dividends for 2023.

In 2023 Sber remained the largest bank in Russia, with its number of active retail clients increasing to 108.5mn people, and corporate clients to 3.2mn. Net interest income grew by 36.8% to RUB2.6 trillion, and net fee and commission income rose by 9.4% to RUB764bn (excluding one-off conversion operations by 15.4%).

In 2023, loans totalling RUB28.7 trillion were issued, and the total loan portfolio increased by 27% to RUB39.4 trillion. The volume of funds raised from private clients reached RUB22.9 trillion (+RUB4.4 trillion).

The bank's net income from operations with financial instruments, foreign exchange and currency revaluation stood at RUB94bn in 2023, compared with a loss of RUB525bn in 2022.

The CEO of the bank German Gref commented in the press release drawing attention to RUB350bn gains on AI use. The bank also achieved a CIR (cost-to-income ratio) below 30% for the first time. 

At the end of 2023 Gref announced the intention to develop "new generation" artificial intelligence (AI) in 2024-2026.

Under Gref, the bank set out to create an all-encompassing digital ecosystem, which was set back by the full-scale military invasion of Ukraine. Sber was at the forefront of tech and IT development, but scaled down some tech projects and offloaded non-core non-financials assets amid the fallout from the war and sanctions.

Sber had aimed to increase its non-financial ecosystem revenues from 1% to 5% of the total by 2023, but since the outbreak of the Ukraine war, the bank has not disclosed its per-business financial breakdown and ecosystem structure.

Gref said that Sber will continue to develop the ecosystem, but with an AI focus in order to move "most decisions online", create a smart AI assistant for customers, and "democratise technology".