2015 Annual Report


Opening statement from CEO and Chairman of the Executive Board

We proved Sberbank’s ability to remain stable and to recover profitability without decelerating the pace of transformation

Dear shareholders, customers, and partners:

Last year was one of the most challenging times for our team. Despite complex macroeconomic conditions we proved Sberbank’s ability to remain stable and to recover profitability without decelerating the pace of transformation.

Sberbank is one of the few companies in the country that did not cancel any projects due to the economic crisis and that continues to implement all the strategic initiatives which are necessary to ensure its long-term existence and competitiveness. Our values—the leading role of the customer, the leadership skills of each member of our team, and cohesion—helped us overcome the difficult period.

In 2015, Sberbank Group earned net profit of RUB 222.9 billion (according to IFRS), which enabled us to restore a double-digit return on equity—more than 10%. Despite extraordinary shocks, full year net profit decreased by only 24% compared to 2014, while in the first quarter the year-on-year lag exceeded 60%.

During the year, we purposefully decreased Sberbank’s dependence on state funding sources. During 2015 we managed to repay almost RUB 3 billion of funds to the Central Bank of Russia and the Federal Treasury, decreasing their share in the Bank’s liabilities from 16% to 1% and thereby eliminating the direct dependence of our financial results on the interest rate policy of the Central Bank. During the entire crisis period of 2014–2015, not once did Sberbank approach the Central Bank of Russia for additional capitalisation—our own resources enabled us to work effectively even during the extreme conditions of the crisis.

Another contributing factor in the rapid recovery of profitability was increased efficiency and very strict discipline with regard to expense management. Despite this high inflation level, we kept the growth of expenses significantly lower than the average annual inflation rate.

A significant achievement in 2015 was the introduction of the new operating model of Sberbank branches. As a result, customers’ issues are solved on the spot, consultants successfully promote services, the level of operational errors is decreasing, and queues are becoming significantly shorter. The number of active users of Sberbank Online internet banking approached 30 million.

In 2015, Sberbank increased its mortgage portfolio to RUB 2.2 trillion, allowing us to capture 55% of the overall mortgage market. This achievement is related to an improved approach to working with customers and to Sberbank’s participation in the state mortgage support programme for primary housing. Sberbank’s share in this programme exceeds 50%.

Sberbank’s non-cash services underwent a significant transformation. Quantitative achievements include millions of active cardholders, tens of thousands of ATMs, and hundreds of thousands of POS terminals in the sales network, which allowed us to make a qualitative leap as well resulting in millions of customers increasingly preferring non-cash payments for services and P2P transfers showing explosive growth.

With the corporate customer segment, we significantly increased the deposit volume increasing our market share by almost 25% during the year. In 2015, corporates opened more than 400,000 new accounts in Sberbank. We are developing digital services for legal entities and continuing to create an ecosystem for corporate customers that helps quickly and conveniently solve everyday business tasks. The number of Sberbank Business Online platform users reached 1.3 million.

Starting in 2013, customer satisfaction level has become one of the key performance indicators for our team. During 2015, the level of corporate customer satisfaction and loyalty reached 67%, exceeding the average market level by 30%.

Sberbank is improving its risk management system. The use of modern, innovative risk management technologies allows us to maintain portfolio quality significantly higher than the market. In 2015, we continued the creation of a risk culture that helps identify, analyse, and minimise risks at all management levels and in all areas of our business.

In 2015, we finished an unprecedented IT system centralisation programme, which was implemented by a team of 32,000 people over the course of four years. This resulted in one of the world’s largest centralised IT platforms, which is making it possible to increase the effectiveness and reliability of our business processes. Implementation of this project is laying the foundation for the appearance of brand-new technological solutions for maintaining competitiveness in the future.

All of our accomplishments are the result of the concerted efforts of the close-knit Sberbank team. I would like to thank everyone for their contribution to the overall result. Without your commitment, positive attitude, and ability to listen to each other, it would have been much more difficult to overcome all the obstacles we faced in 2015. We understand that there are a lot of challenges ahead, and our future will directly depend on swift responses, innovations and open dialogue on all levels. That is why we continue to invest in developing the competences and leadership qualities of our entire team.

It is crucial for us to support and promote initiatives capable of improving the life of our customers, their families and society in general. Sberbank finances a lot of socially significant infrastructure projects, such as road construction and the introduction of modern industrial technologies in factories, residential construction, etc. Charity is an integral part of Sberbank’s activity. In 2015, we established the Contribution to the Future Charity Fund to implement projects aimed at supporting education and creating an inclusive environment, which fully corresponds to our mission and values. Our employees share these values and approaches to charity. In 2015, they actively participated in more than 700 volunteer initiatives.

To conclude, I want to thank our shareholders for their support during the past year. Your decision to re-allocate the 2014 profit for the strengthening of the bank’s capital allowed us to go through a period of great uncertainty with an additional margin of safety. And I want to assure you that we will continue moving toward our goal—to become the best partner for our customers and shareholders.

Management responsibility statement

I confirm that to the best of my knowledge and belief:

(a) the financial statements, prepared in accordance with the International Financial Reporting Standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of Sberbank Group as a whole, and

(b) the management report includes a fair review of the development and performance of the business and the position of Sberbank Group included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

On behalf of the Executive Board,

Herman Gref
CEO, Chairman of the Executive Board