Investing.com -- Sberbank, Russia's largest lender, reported a record annual profit of 1.58 trillion roubles ($18.1 billion) on Thursday, despite rising interest rates, which have reached 21%.
The bank's corporate and retail lending sectors have managed to adapt to these increasing rates, contributing to the financial success.
The central bank's high key rate has enhanced banks' net interest margins. However, the rate has now reached a point where lending growth is beginning to slow. This is due to companies reducing their investment and individuals choosing to keep their funds on deposit rather than borrowing.
Sberbank's profit for 2024 saw an increase of 4.8% from the previous year. The bank's corporate loan portfolio experienced substantial growth, increasing by 19% year on year to over 27.7 billion roubles, according to CEO German Gref.
Meanwhile, the retail portfolio faced pressure from high rates and stricter regulation, resulting in a more modest growth of 12.7% for the year, equating to 18.1 trillion roubles.
The bank's net interest income for 2024 reached 3 trillion roubles, marking a 17% increase from the previous year.
However, the return on equity (ROE) saw a decrease, dropping by 1.3 percentage points to 24% for 2024.
Looking ahead, Sberbank anticipates the ROE to be above 22% in 2025.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.