OREANDA-NEWS. March 25, 2009. Sberbank reported a 4.5-fold decline in RAS net profit to RUB 5.1 bn in January-February 2009 from RUB 23 bn in the same period a year ago due to the formation of additional reserves for possible loan losses.

As of March 1, 2009 the rate of non-performing loans (NPLs) in the lender’s credit portfolio equaled 2.1% compared to 1.6% in January and 1.8% in February. In the first two months of the year the bank’s expenses related to reserve formation totaled RUB 59 bn. Reserves formed for loans are 2.5 times higher than for NPLs, the bank said Tuesday.

 Growth in reserves related to the growing portion of NPLs due to the deteriorating creditworthiness of clients is eroding the profits and capital of most Russian banks. The government’s anti-crisis package calls for providing Sberbank with subordinated loans for RUB 500 bn in 2009, but this issue was given for consideration to the Central Bank of Russia, the lender’s major shareholder, and for the time being the latter says there is no need to additionally raise Sberbank’s capital.