Sberbank not ruling out further deterioration in quality of retail, corporate loan portfolios

MOSCOW. April 28 (Interfax) - Sberbank does not rule out a deterioration in the quality of its retail and corporate loan portfolios in the future, Sberbank Deputy Board Chairman and CFO Taras Skvortsov said.

"In general, in retail, we cannot rule out further deterioration compared to what we saw in the first quarter. Because recoveries [from overdue debt] still occur with a considerable time lag. And what we are seeing today is still, you could say, a factor of 2024," Skvortsov said during a conference call on Monday.

"As for corporate lending, compared to the first quarter, there will definitely be some deterioration, because it is, of course, impossible to have a positive cost of risk for the entire year," he said.

The cost of risk for the corporate loan portfolio in Q1 2025 to International Financial Reporting Standards (IFRS) was close to zero, he said.

"Across the total loan portfolio, we restored reserves in the amount of almost 7 billion rubles," he said. This dynamic was driven by the repayment of problematic debt and a number of methodological changes related to the revision of the risk assessment model, he said.

The cost of risk for the retail loan portfolio increased against the backdrop of high interest rates in the economy, tighter regulations and a slowdown in portfolio growth, reaching 3.3% by the end of Q1.

In general, the quality of the loan portfolio has a negative trend, which was further intensified by the traditional seasonal factor typical for Q1, Skvortsov said.

The overall cost of risk rose to 1.2% in January-March of this year compared to 0.5% for the same period last year. The share of stage 3 loans during the reporting period increased by 40 basis points (bps) to 4.1%.

"This trend [the deterioration of portfolio quality] was mainly driven by unsecured retail lending, as well as some deterioration in the small business segment," he said.