Russia's largest bank drops nearly 80% of profits

 Sberbank is still optimistic about profits this year amid a series of banks in Russia under sanctions.

According to Reuters, the profit in 2022 of Sberbank (Russia) has plummeted because Western sanctions have negatively affected the country's financial industry. German Gref, CEO of Sberbank, considers 2022 to be "the most difficult year".

The bank recorded a profit last year of 270.5 billion rubles ($3.57 billion), down 78.3% compared to 2021.

Sberbank's profits declined in the context of a series of Russian banks being excluded from the SWIFT global payment system and not having access to necessary software and equipment. Many financial institutions from the country of birch are subject to sanctions and asset freezes abroad.

However, Gref said that the bank's profits could still recover this year, reaching near the record of 1,250 billion rubles (about 16.5 billion USD) of the time before the pandemic.

He also said that Sberbank would consider paying back dividends. A decision will be made this month. The Russian Finance Ministry forecasts that Sberbank will set aside half of its profits in 2022 to pay dividends.

Sberbank's resilience in the face of sanctions helped Russia's banking sector recover from a loss in the first half of 2022. However, several other banks, including VTB (2nd largest bank in Russia), are still in a difficult situation.

Russia's central bank last week warned of "systemic risks" to the industry as a whole as banks scramble for profits. Currently, Russian banks focus on serving the public sector and large enterprises.

"We implemented our anti-crisis plan, which included changing priorities, introducing strict savings policies, closing and selling our international businesses, as well as implementing new regulations. accounts for loan portfolios and frozen assets," said Gref.

Sberbank's operating expenses in 2022 decreased by 1.5% compared to the same period in 2021. The bank has also collected $6 billion in foreign currency from abroad since the sanctions were enacted.