Daily Times

MOSCOW: Russia’s biggest bank Sberbank on Wednesday announced a nearly four-fold growth in net profits in the first quarter of 2016, citing a recovery in borrowing and “moderate stabilisation” of the economy.

Net profit grew from 30.6 billion rubles ($464 million) in the first quarter of 2015 to 117.7 billion rubles ($1.79 billion), surpassing expectations.

Improvement in our return on equity in the first quarter of this year was attributable for continued recovery of net interest income, a reduction in the cost of risk and tight control over operating expenses on the back of moderate stabilisation of the economy, Sberbank’s financial chief Alexander Morozov said in a statement.

Russia’s banking sector has been hit with Western sanctions over the Ukraine crisis, while the economy is in recession and real incomes have dwindled along with the value of the ruble.

The crisis has led to a rise in interest rates and a fall in Russia’s purchasing power, factors negatively affecting borrowing activity. The bank however said its revenue from interest rates jumped 62 per cent to 325 billion rubles ($4.93 billion), with commission income growing by 12 per cent to 77.2 billion rubles ($1.17 billion).

The bank has been on the blacklist of the US Department of Treasury since September 2014 and has also been targeted by economic restrictions imposed by the European Union.