Sberbank's profit USD 10 billion 2020
On January 15 Russia's largest bank published its profit for 2020. The profit was 7.7% down on 2019. The bank is state owned and has a market capitalization of USD 88 billion. Profits for Sberbank collapsed in Q2 2020, although they have since rebounded.The bank aimed to make USD 13.6 billion 2020 but fell short of that due to unforeseen circumstances.Russian banks are contending with a number of headaches. The fall of the RUB, rising unemployment and historically low interest rates are among these. Sberbank has increased its loss provisions. The bank has created a larger reserve. Lending is a major part of Sberbank's business, so low interest rates hurt the bank badly.Overdue loans rose almost 50% in 2020. They are 3.2% of the bank's portfolio, so that is not too serious. The bank has provisions to cope with write-offs of 6.2% of all loans.The bank made a 16.5% return on equity in 2020. That is creditable bearing in mind the situation, and shareholders are satisfied.Government support of the financial sector was a big boost. Subsidized loans were vital for the bank. The number of Sberbank mortgages increased by 20%.Sberbank will probably have a very good 2021. It is investing heavily in technology.On January 15 Sberbank shares were at a record high of USD 3.87 in Moscow. That is 60% up from nadir of March 2020. The bank paid out the largest corporate dividend in Russia ever in 2020.