Earnings call transcript: Sberbank Q3 2025 sees 9% profit surge

Sberbank of Russia reported a 9% year-over-year increase in net profit for the third quarter of 2025, reaching 448 billion rubles. This marks a 6.5% rise in net profit to 1,307 billion rubles for the year-to-date. The bank’s return on equity (ROE) stood at a robust 23.7%. Despite the positive earnings, the stock price remained unchanged at 199.27 rubles as of the latest trading session. According to InvestingPro data, the stock trades at an attractive P/E ratio of 4.21 and Price/Book of 0.37, suggesting potential undervaluation. The bank has delivered a solid 3.28% year-to-date return while maintaining low volatility with a beta of 0.39.

Key Takeaways

• Net profit increased by 9% year-over-year in Q3.
• Operating income before provisions rose by 17.4%.
• Active retail clients grew by 600,000, reaching 110.5 million.
• Sberbank launched new AI-driven consumer products.
• GDP growth forecast revised down to 0.5-1%.

Company Performance

Sberbank’s performance in Q3 2025 was strong, with significant increases in both net profit and operating income. The bank’s strategic focus on expanding its client base and integrating artificial intelligence across its services has paid off, as evidenced by the growth in active retail and corporate clients. The bank’s expansion in the AI sector, including new consumer devices and payment technologies, reflects its commitment to innovation and customer service. InvestingPro analysis shows the bank maintains a "GREAT" overall Financial Health Score of 3.16, with particularly strong marks in profitability and relative value metrics.

Financial Highlights

• Net profit: 448 billion rubles (9% increase YoY)
• Net interest income: 894 billion rubles (17.3% increase YoY)
• Total operating income before provisions: 3,079 billion rubles (17.4% increase YoY)
• Operating expenses: 12.5% increase in Q3, 14.4% increase over nine months

Outlook & Guidance

Looking ahead, Sberbank forecasts corporate lending growth of 7-9% and retail lending growth of 2-4%. The bank expects its net interest margin to grow by more than 5.9% and anticipates net fee and commission income growth of 3-5%. The capital adequacy ratio is projected to remain above 13.3%.

Executive Commentary

"We increased the number of our active retail clients by 600,000 people to 110.5 million," said CFO Taras Kvarcov, highlighting the bank’s successful client acquisition strategy. An unidentified speaker emphasized the bank’s commitment to customer service, stating, "The goal is to give the best possible service for the clients." Another executive noted, "We are investing in [AI] to prove by example that it can increase the productivity of the organization."

Risks and Challenges

• Economic Uncertainty: The revised GDP growth forecast of 0.5-1% may impact economic activity and, consequently, banking operations.
• Inflation: With inflation forecasted at 6.5-7.5%, cost pressures could affect profitability.
• Regulatory Changes: Potential impacts from new VAT regulations and intangible assets could influence capital adequacy.
• Market Competition: Increasing competition in the AI and consumer technology sectors may challenge Sberbank’s market position.
• Cost Management: Rising operating expenses remain a concern, necessitating efficient cost management strategies.

Sberbank’s Q3 performance reflects its resilience and strategic focus on innovation and customer growth, positioning it well for future challenges and opportunities.

Full transcript - Sberbank Rossii PJSC (SBER) Q3 2025:

Anastasia, Moderator, Sberbank of Russia: Good afternoon, dear participants. Thank you for joining us. Welcome to our conference call on the disclosure of Sberbank of Russia’s results for nine months of 2025, consolidated financial results for the group under International Financial Reporting Standards. We have with us today Taras Kvarcov, Vice President and CFO of Sberbank of Russia, and we have a brief presentation for you with more information on the results. After that, we’ll have a Q&A session. Please use our channel, Sber channel for investors. You can access it by scanning the QR code on the screen. You can use this channel to submit your questions. We will see your question and answer it. Now, before we begin, please note that the conference call is being recorded today, October 28, 2025. The call may include forecasts and expectations, which may differ from the actual metrics going forward.

For more information on the risks, please see the disclaimer in our presentation. Thank you. We begin. I give the floor to Taras. Thank you, Anastasia. Good afternoon, everyone. Good afternoon, dear participants, dear analysts, journalists, Sberbank of Russia investors. Today, we’re summing up the results of Sber Group’s activities for Q3 and nine months of 2025. Let’s begin with net profit. Year to date, net profit has increased by 6.5% to ₽1,307,000,000,000, with an ROE of 23.7%. In Q3, Sberbank of Russia earned ₽448,000,000,000, which is 9% higher than last year. We increased the number of our active retail clients by 600,000 people to 110.5 million. The number of Sberbank of Russia’s possible loyalty program members grew to 98.7 million, plus 6.8 million year to date. The number of Sber Prime subscribers stands at 22.2 million.

The number of corporate clients has increased by 120,000 to 3.4 million companies since the beginning of the year. The number of members of the corporate loyalty program, Sber Business Spasiba, is also growing. In Q3, it acquired 91,000 new clients, and since its launch, 864,000 companies have joined it. In Q3, we offered our clients new services and products. In particular, we expanded the number of Sberbank of Russia payment scenarios and launched our own payment technology to enable iOS users to pay with a phone. It’s called Vžuh. It immediately gained traction, and within just a couple of weeks, more than 2.6 million people used it. Together with the Federal Tax Service, we launched Russia’s first platform for automatic receipt of Social Security tax refunds in Sberbank Online.

Thanks to this service, by the end of the year, the number of clients receiving a refund will increase by several million people. We are talking about people who have never applied for a tax refund before, and also the amount of taxes refunded will increase. The service is completely free of charge for the clients. We also launched new consumer AI devices and introduced Russia’s first smart ring with an embedded AI consultant. We’ve also launched a new generation device called Sber Boom Micro. In Q3, with a very high key rate in real terms in the background, the Russian economy continued to slow down. According to Sberindex, business turnover growth nominally amounted to 2% year over year, which is five times slower than a year ago. In real terms this year, there was no growth in any of the three previous quarters.

The slowdown is affecting many industries, and some of them are decreasing even in nominal terms. A significant slowdown is also occurring in retail. According to Sberindex, once again, wages in Q3 increased only by 2.7% in real terms compared to a 10% growth in Q3 2024. Household spending also responded with a slowdown. In Q3, they grew only by 2.2%. The Bank of Russia, judging by their press release materials, does not intend to reduce pressure on the Russian economy until the end of this year. In this context, we have revised our GDP growth guidance for 2025 from 0.5% to 2% down to 0.5% to 1%. GDP growth will probably not exceed 1%, which means a more than four-fold slowdown. Our inflation forecast for the current year remains unchanged at 6.5% to 7.5%.

One reason is the announced VAT increase from 2022 starting in 2026, but part of this increase will likely occur in December 2025. Now the detailed results of Sber. In Q3 2025, net interest income increased 17.3% year over year to ₽894 billion on the back of growth in performing assets. In Q3, we observed a recovery in demand from corporate and retail clients alike. This was expected as the portfolios remained almost unchanged in the first half of the year. Over the reporting quarter, the loan portfolio of legal entities increased by 7.1% to ₽29.9 trillion, mainly thanks to large and major clients. Our market share increased by 70 basis points to 33.1%. Sector-wise, the highest demand was still concentrated in housing, oil and gas, and transport.

The average return of the corporate portfolio decreased by 112 basis points in Q3 to 16.5%, and the share of the portfolio at floating rates was around 74%. The cost of risk for the corporate portfolio decreased by 9 basis points to 98 basis points in Q3, and over nine months, the cost of risk amounted to 66 basis points. The quality of the loan portfolio remains stable. The segment of large and major clients is more resilient. Small and micro enterprises are naturally struggling with higher rates much more. We maintain the sector-wide forecast and expect corporate lending growth rates to be between 7% and 9% in 2025. Sber will likely grow better than the sector, according to our revised forecast, as a number of major market participants, universal banks, have certain difficulties in meeting the Bank of Russia’s capital adequacy requirements.

Retail lending also experienced a positive trend in Q3. The portfolio gained 2.1% and totaled 18.5 trillion RUB. The main growth driver was housing and car lending, as well as credit cards. Sber’s market share in the retail lending market also increased by 50 basis points to 48.5%. In Q3, the mortgage portfolio increased by 2.5%, mainly due to disbursements under state programs and amounted to 11.7 trillion RUB. Sber’s share in the mortgage market increased by 60 basis points to 55.6%. Demand for consumer loans remained moderate, with the portfolio almost unchanged over the quarter, and loan disbursements were fully offset by repayments. Sber’s share in the consumer loan market amounted to 38.3%. Once again, we observed growth by 0.3%. The credit card portfolio increased by 1.5% to 2.5 trillion RUB, while the portfolio growth amounted to 8.3% since year’s start.

Sber’s market share increased 10 basis points to 54%. The car loan portfolio in the third quarter experienced very significant growth amid the customers’ expectations of an increase in visiting commissions, with the portfolio volume reaching 0.6 trillion RUB. Since the start of the year, the portfolio has grown by 7.1%. The cost of risk for retail lending in Q3 dropped by 58 basis points to 2.1%. The portfolio quality was under pressure, mainly due to the unsecured lending segment and amid the loan portfolio reaching maturity. We’re talking about the loans disbursed in the previous months and even the previous year. The actual impact of the lower rates on the market dynamics turned out to be slightly higher than our expectations. We are slightly revising upwards the forecasted growth rates for the sector, specifically for retail lending, to the range between 2% and 4%.

As planned, Sber will be growing better than the sector. As for the quality of the loan portfolio, as I said, the dynamics met our expectations. A certain deterioration continued in retail lending, because of which the stage three loans grew from 4.5% to 4.8% over the quarter, while the share of loans delinquent by 90 or more days increased way lower than expected from 3.2% to 3.3%. These are mainly loans for which we created provisions in advance. Therefore, the total cost of risk for Q3 decreased by 29 basis points to 1.42% compared to 1.7% in Q2. This is well within our expected range, which is why we have maintained our overall cost of risk guidance for 2025 at 150 basis points. The dynamics of funds due to individuals remained fairly stable during Q3.

Their volume at Sber increased by 2% or 9% since the start of the year to RUB 30.3 trillion. Sber’s market share amounted to 43%, plus 0.7% since the beginning of the year. The cost of funds due to retail customers went down from 11.8% to 10.8% in the quarter. Amid slowing salary growth and a gradual transfer of retail customer savings into investment instruments, we have revised the forecast market growth rates from 16% to 18% down to 12% to 14%. With this segment, Sber is planning to demonstrate better growth than the sector. Funds due to corporate customers in Q3 increased by 6.7%. In real terms, reaching RUB 17.6 trillion since year’s start, the growth stood at 7.9%. Sber’s market share increased over the quarter by 50 basis points to 19%. The average take rate decreased by 200 basis points over the quarter to 11.5%.

With this market, we maintain the sector forecast for corporate customer funds growth at a 2% to 4% range, and we will continue to grow alongside the sector. As for net interest margin in Q3, it increased by 8 basis points to 6.17%, mainly against the background of a lowering cost of funding for retail and business customers, as well as stronger rubles and higher rates of portfolio turnover. It is in this context that we therefore increase our margin growth forecast for 2025 to more than 5.9%, which is reflected in our forecast for Q4. We do not expect a significant decrease of the margin in Q4. Net fee and commission income for nine months increased by 0.5% to RUB 615 billion. In Q3, the indicator decreased by 0.8% year over year, given the previous year’s high base and one-off accruals of income from corporate clients.

On the other hand, we also pursue this policy or strategy where we are gradually canceling fees for payments and transfers, especially for Sber Prime customers. Most of these transactions are becoming free of charge for these clients. In connection with this, for the year, we are lowering our target forecast for the net fee and commission income growth. We are lowering it to the range of 3% to 5% from 7% to 10%. In 2024, Sber, for the first time ever, became the largest acquirer and surpassed such giants as JPMorgan and Worldpay. We became the world’s largest acquirer in terms of the number of processed transactions. We processed almost one-tenth of the global turnover. The total operating income of Sber before provisions increased by 17.4% over the nine months to ₽3,079,000,000.

Operating expenses over the nine months increased by 12.5% over the quarter and by 14.4% over the nine months, which allowed us to improve the operating expense-to-income ratio by 70 basis points to 28%. The key factor here was the large-scale integration of cutting-edge solutions based on generative AI in many of Sber’s processes. We’re talking about GigaChat. Equity increased by 9.7% to ₽7.9 trillion since the beginning of the year, thanks to the net profit. Our capital adequacy ratio at 20.0%, even after paying record high dividends, exceeded the minimum threshold of 13.3% and amounted to 13.4% at the end of nine months, as of October 1. We maintain our capital adequacy forecast for the end of the year at the level above 13.3%. Finally, I would like to share our updated forecast for 2025.

We improved the forecast for our market share of corporate deposits and loans and raised our expectations for the average net interest margin to more than 5.9%. In terms of net fee and commission income growth, we lowered the target range to 3% to 5%. As for the expected cost of risk, operational efficiency, target returns, and capital adequacy, our forecasts remain the same. Thank you for your attention. I’ll be happy to answer your questions. Thank you, Taras. We are going to start the favorite section, the Q&A session. We’ll be happy to take your questions. To ask a question live, please click the reaction, the response icon on your screen. We will invite you to take the floor to ask your question and make sure you have activated your mic. I see that Yevgeny Kipnis with Alfa-Bank would like to ask a question. Yevgeny, the floor is yours.

Hello, dear colleagues. Thank you for the presentation and congratulations on the great results for the quarter. I have a question about the topic that’s been highly debated recently, the change of the Bank of Russia approach to deductions from regulatory capital of intangible assets related to the vendor substitution for critical infrastructure, the import substitution. We know the opinion of the Bank of Russia. How does it relate to your business? Do you have any estimates of its effect on your capital adequacy next year?

Unidentified Speaker, Senior Management, Sberbank of Russia: Yevgeny, thank you very much for your question. Yes, it is true. The discussion is on, and the central bank has talked about the change of the regulation in terms of the nonmaterial assets, non-tangible assets being accounted for in the capital. What type of intangible assets will be included? That’s the most important question for us. I mean, obviously, we have various elements of infrastructure. We have generative AI, where we have invested a lot. The decree of the president and the regulations put forth by the government will dictate what elements will be included. It will positively affect this capital adequacy ratio. It depends on the assets that will be included in the regulation. It might have the positive effect of what, 10%, maybe even more than that, one-tenth of the contribution. The main source of insurance, CAR, and insuring the capital for the lending is our profit.

That’s the main driver, not the changes in the regulations. Thank you. Thank you. And thank you, Yevgeny. Next question is from Olga Nidionova from Sinero Company. Hello. Congrats with great results. Question about the structure of your corporate lending. Now you have increased your share on the market, and you were the largest creditor in Q3. Especially in September, it was pretty visible that Sberbank of Russia has become the only largest bank that delivered significant growth. The growth is mostly driven, mostly focused on the lending segment for the project financing. What segments of project financing do you put your capital in? Is it mass market or some other segments? What are the coverage ratio with escrow accounts in this segment? Why do we see this acceleration of growth right now? Thank you for the question and for the congratulations, Olga.

As for the corporate lending, it is true we have increased our portfolio in Q3. That was a pretty good growth. In Q2, we basically had no growth. This is what we expected, that in the second half of 2025, the demand for loans will be much higher. We did not quite expect that Sberbank of Russia will cover such a big chunk of the demand because, as you have said, in September, other banks did not increase their portfolios. We are experiencing a major growth here, and we are therefore feeling that customers are more likely to go to Sberbank of Russia for the loan, and the demand is pretty high. I cannot really agree with you that the growth of the portfolio is going through some separate segments.

If you look at the industries, our report has 20 industries, and only two or three industries do not show any growth. Basically, as for all our other industries of the Russian economy, we are seeing the growth for the lending. Housing lending was the leader, and as for the project financing, the overwhelming majority of customers are the housing construction companies. As for the new projects, other new projects, we basically have no lending applications that can be approved, and we do not see many customers that are demanding that because it’s pretty hard with current rates. It’s pretty hard to find the projects that will deliver the ROI needed. We have seen it clearly in September that the majority of the growth of the portfolio was accounted for by the military lending and defense lending. In Q4, this trend is going to continue and strengthen.

We see that the defense lending is delivered for the defense companies. As for the housing construction and escrow accounts, in Q3, we’re seeing a number of important trends that are reversing. Basically, we’re seeing reversing trends. The mortgage increased compared to Q2 in 2025, which is more important than Q3 of 2024. The developers are selling more of the housing units, of the flats, and the coverage of escrow accounts increased up to 70%. It was higher than we had in Q2. These are positive trends. We hope that they will continue. On the market, we see the decrease of the... We do not see that the prices for the housing go down. The industry has gone through very hard times of very high rates.

We have corporate and retail customers here, and we are very happy that they are returning, going back to making mortgages and taking loans for development. Thank you, Olga. A question from the chat. Hello. Can you share the forecast for the FX rate for 2025 and for 2026 on average? In line with the latest forecast of the Central Bank of Russia, what will be the average rate? 13%, 15% range. Do you expect some influence on your rates and on your situation? Thank you. A pretty short message and quite a lot of questions. As for the FX rate, dollar ruble exchange rate, we expect the ruble to weaken by the end of the year. It’s really hard to talk about the level, but it should be around 90 rubles for one dollar.

As for 2026, we’ll give the forecast for our indicators and for the macro scenario on our big conference that we’re going to organize on the 10th of December. There we will answer many questions that our analysts and investors are interested in and ask a lot to Sberbank of Russia concerning the next year. As for the key rate, that’s a weird question. The central banks are setting the rates, so we have to be aligned with their forecast. They have all the levers here. The only thing we can do is just account for that and factor that in our business. The forecast was revised upwards, and the markets quite nervously reacted to that, responded to that. The situation is calming down a little bit. The range is pretty wide. This range kind of means that they have a very large room for maneuver.

The trajectory of the rates is pretty hard to forecast. We are now revising our forecast for the next year, given the previous central bank decision on the rate. As for the quality of the portfolio, we will factor that in our provisioning, and I don’t think it will have any effect because we were ready for high rates for this year for sure. Next year, the rate will be 13%, 15%. Yeah, it’s possible it will be for sure lower than in 2025. We do not think that we need to create additional provisions for the next year. Thank you. Thank you very much. The detailed forecasts for 2026 will be shared with you on our conference that will take place on December 10th. Artyom Ferminov from BKS Group will have the next question.

Thank you very much for the exciting presentation and for the opportunity to ask a question, two questions. The first one is related to the net fee and commission income dynamics. Two articles are important here. The card net fee and commission income, there’s a very small incremental increase year on year. The cash desk net fee and commission income. Is it possible to go back to the forecast that we used to have where the fee and commission income on cards was more detailed? Non-banking business dynamics, that’s the second question. We see a major increase of the financial efficiency of non-banking transactions, yet there are some slowdowns. There’s a decrease of 15% in Q3. During the year, it went down by 50%. Is there a potential to increase the efficiency to decrease the costs, the losses, and maybe to even break even? Thank you.

Thank you for the questions, Artyom. As for the net fee and commission income, it is true. Q2 and Q3 saw a major slowdown of the dynamics related to two large areas: the settlement and cash desk transactions and the card transactions. As for the cards, the major drivers of the fees and commissions are the annual fees for the cards. Sber Prime subscribers have a free annual fee. They don’t have any annual fee for the cards. Many banks are improving the programs, the loyalty programs. We are improving the program as well. The number of the subscribers is growing, and the loyalty program participants are growing. As I’ve said before, it’s millions of customers. As for the settlement services, the cash desk transactions are going down. There are more and more cashless transactions, transactions related to their retail customers sent to the companies.

The business customers are going down because the limit is growing exponentially if you are a Sber Prime subscriber. A number of transactions that we... Some transactions are not covered by commissions anymore. We have removed some of the fees and commissions for the Prime subscribers. The mobile bank and the text messages payments, the payment for the text message alerts have been removed for subscribers. That’s a traditional policy of decreasing the fees and removing the fees of the basic commissions for our VIP customers, Sber Prime customers. We see the loyalty of the customers therefore growing. As for the losses for their non-financial businesses, the losses are going down. There’s still some room for improvement, of course. There’s some potential for proper growth. Our goal is to ensure that we break even in many companies, that we start to generate profits there.

The growth of the profits is growing for non-financial businesses. Next year, this trend will continue, and these non-financial businesses will deliver in the nearest future. Thank you. Thank you very much. Next question. Margarita Marjan from Softcom Bank. Yes, hello. Congrats with great results. Two questions. First one, can you please talk a bit more about the cost of risk, especially as it goes for the retail portfolio? Could you tell a bit more on why it went down? Sber Prime subscribers, the number of subscribers went down a little bit. How can you explain that? Margarita, thank you very much for your questions and congratulations. Starting with Sber Prime, if you look at the dynamics of the Sber Prime subscribers in 2023 and 2024, the situation was similar as what we expect in 2025.

Amid major autumn and December sales in the first half of the year, the situation stabilizes. Some customers that were test driving it and having a free trial, when their free trial is ending, they unsubscribe. In the second half of the year, it increases again. In Q4, we expect the number of subscribers to grow significantly more than in Q3. As for the cost of risk, there was a decrease. The average cost of risk, as that goes for retail and corporate customers, is mostly driven by the fact that the portfolio that we are creating right now and the loans that we are issuing right now is of higher quality based on the metrics that we’re using to assess it. The portfolio is growing. It’s of higher quality, and it obviously affects the cost of risk.

When we had our call for Q2, we said that we expect this level that we achieved in Q1 and Q2 to change, to reverse. The cost of risk should stop growing. For many segments of our customers, we are seeing that in Q3, this breaking point has been achieved and the situation is reversing. We do not expect any radical growth of the cost of risk. Cost of risk might happen in some standalone cases, but amid lower rates, it might happen. Unfortunately, the economies have slowed down significantly. If it was not for that, the results would be much better. As for Q4 and 2026, we are looking at these parameters and we think that the cost of risk might be on the same level as in Q2 2025. Thank you very much. Thank you for the question. Another question from the chat related to the legal case.

€263 million should be returned according to the ruling of the arbitrage court. This was the case Sberbank of Russia against Euroclear. How will it affect the net profit of Sberbank of Russia? Quite a lot of efforts are now focused on returning the assets that were taken away from us. This is one of the examples of our work, of our efforts. Currently, it is the first stage, and based on these rulings, we do not factor in these rulings into our calculations. We wait for all the stages of the legal procedure to be over. As for this case, you should not factor that into our accounting and reporting. Let’s wait for the next rulings. If they are positive, then we are going to restore the provisions for these assets. Thank you. Thank you very much. Moving to the questions from journalists. Journalists, very welcome.

Very warm welcome to you. Anastasia Savelova from Interfax will have the first question. I have a question to build on the previous question. Have you sent the request on the requirement to make a refund to the central bank? Is this an option on taking the blocked assets? At the end, 20.0% CAR, might it go lower than the 13.3% threshold? Might it in the end affect the dividend payout? If you pay a major dividend payout, will it affect the CAR? The budget policy, the Minister of Finance has announced on the budget policy, the subsidies volumes will go down by 0.5% starting from January next year. Will that mean a major drop in the mortgages in January? January is not very active. Thank you.

Taras Kvarcov, Vice President and CFO, Sberbank of Russia: Thank you, Anastasia. As for the blocked assets, nothing changed in our plans. We are finalizing the approval of the list of assets, and we are putting together a rather big set of documents for each one of the assets before we file the appeal. In November, we plan to have a meeting of the Supervisory Board and request the approval of the board for the filing. As soon as we have the decision of the Supervisory Board, we will submit an official request to the central bank. Nothing has changed. As for the capital adequacy risk, in 2025, the answer is no. We do not see such risks. We have in our strategy the amount that we are planning to earn in Q4, the changes in the capital, and what we can disperse, taking into account the capital across different types of customers and different retail products.

Given the dynamics of market demand on one hand, and on the other hand, all the external factors, the exchange rate of the ruble, all kinds of indexes, of course, we factor all this in. If necessary, we make adjustments. The previously estimated level will remain until the end of the year. As for 2026, on the 10th of December, on the Investor Day, we will announce our expectations. Overall, this is one of the financial strategy parameters, and we will do our best to comply with it in 2026 as well. As for the Ministry of Finance mortgage at preferential rates, overall, our expectations were, and we were preparing for the risk of a decrease in the amount of subsidies earlier in November 2025, especially given the opinions of the market participants.

The Ministry of Finance decided to meet us halfway, and part of the effects will only occur in 2026. Whether it will affect negatively the mortgage disbursements, likely the answer is yes, it will affect it negatively, but it will also depend on the level of rates overall for customer funds in retail and corporate, the rates at which banks will be attracting customer funds, and whether they will be able to offset this decrease in the subsidy with the decrease in rates for the customers. If not, the big amount of loans being approved today will no longer be approved, and approvals and disbursements of mortgages will go down. The exact figures, I think we will have to wait and see and discuss it towards the end of the year because the range may vary significantly up to dozens of basis points.

It will also largely depend on the Bank of Russia and its take on the macro add-ons on mortgages. Overall, we will have to, as I said, wait and see until the end of the year, and we will, of course, communicate the consequences of this decision for our disbursements. Thank you. Next question, Tatyana Voronova of Frank Media. Good afternoon. Thank you for the call. Once again, congratulations on the results. Clearly, it will be higher than expected for 2025, even though we still have two more months to go. I have two questions and two clarification requests. First, operations with bank cards. We see a significant drop in the retail segment, the B2C segment. In general, does the bank have any expectations, midterm expectations, about when it will be possible to offset this lost profit with a QR project that you launched?

Given the opposition on the side of the Bank of Russia, do you have any plans, any expectations, any horizon, any idea about the horizon when you’ll be able to compensate for it with the QR payments? One more question. You mentioned that you continue to break even with your non-financial businesses, and this process is still ongoing. It will continue in the next year. Is there a deadline for the breaking even for this process? I have two more questions. Will you be changing your tactic in any way for the OFZ auction? I know that Sber does not have a big share in terms of purchases, but given the changes in the market, will you be adjusting your share in any way? It shows in your statements that since the beginning of the year, you have a significant reduction of headcount. In Q3, this process continued.

What are the main categories of employees that were affected with this headcount reduction? Should we expect that this reduction will continue in Q4 and in the beginning of the next year? Thank you. Thank you, Tatyana, for the congratulations and for your questions. As promised, we are delivering overall for the year. You can see that profits are higher than in 2024. As for fees and commissions and whether we can offset it together with a number of other banks, whether we can compensate for it with QR codes, with this new mode of payment. As a matter of fact, there is no connection. We did not launch this company to make the profit that will offset things that we are losing as a bank. The strategy is different. The strategy is to give the best payment method for our clients.

The situation in the market is that fee and commission income of the banks in the payment market have this downward trend. The swift payment, the marketplaces that are transferring through banks or wallets, transactions in marketplaces, and since the turnover is growing very rapidly and the rates are lower, this once again is affecting fees and commissions. The goal, as I said, is to give the best possible service for the clients. If we can see an offset, a return on these investments, where we expect to see the most is interest income because clients will likely keep more money in their investment and savings accounts. With interest income, the growth rate is very impressive, and it is way over 15%. We are looking at our P&L and the profit-making items taken together. The situation is completely to our satisfaction.

I do not think we should expect that we as Sber or we as shareholders will be receiving giant dividends from investments in this particular thing. As for non-financial business and its break-even horizon, I think we can talk about the horizon of the next strategy. For a more precise estimate as to the date, the exact date or quarter, I think we’ll be able to say when we talk strategy. As for OFZ, we do have the need to increase the portfolio to meet the liquidity ratios, the liquidity requirements. We will participate in the auctions throughout the next year. The share is indeed quite small, roughly one quarter of the total issue. Since the Ministry is issuing OFZ with a fixed margin, with a fixed yield, I think we will be able to use this instrument to manage our liquidity rather efficiently.

We are more interested in participating in such auctions for OFZ pegged to the rate. I think we might be a little more active towards the end of the year. It will all depend on the yield offered by the Ministry of Finance, the yield that the market will accept. The bottom line is that we will participate in those auctions. The headcount has been decreasing, has been going down over the past years, several years already. This is affecting our branches, the back office, IT departments. That’s because we are deploying pretty much everywhere our GigaChat, our AI agents that are helping employees be more productive. It’s not a reduction in headcount. It’s just that we are recruiting less. Given the natural attrition, the total headcount is indeed going down.

It’s just that this year maybe it was a bit more obvious, a bit more prominent than in the previous years because this year we got the opportunity to deploy the technology at scale, the technology that is giving visible results. We are investing in it, and we are doing it to prove by example that it can increase the productivity of the organization. You can see with the financial results that it is helping us contain the growth of expenses. We are investing more in IT. We are the number one acquirer in the country. Obviously, we need a lot of IT capabilities, very powerful IT capabilities. We cannot do without them. We cannot do this with just the legacy technology. Generative AI also demands a lot of our investment.

Also, with regard to the non-financial businesses, back to your third question, with some businesses we have decided to deinvest with our YAPTEKA, for example. We will be studying these cases. We will be taking this into account for the next strategy. Thank you. The deals are also affecting our headcount. These are all interrelated. Next question. Several sources are saying that we must answer this question. It’s very important. What is the impact on the financial results of Sberbank of Russia from the planned introduction of VAT on banking operations? How would it affect the cost of transactions for the clients? What will it mean for the bank overall? This is a highly debated topic. This is a very significant topic. Not all market participants fully understand the exact operations that will be affected by this VAT introduction.

Speaking of the higher VAT for acquiring and the VAT for banking operations, we are currently at a stage where we are trying to clarify the intended decisions. How will it relate to the tax code? What exactly will be included in the scope of transactions subject to VAT? Potentially, it may spell a more than ₽200 billion increase in expenses, but we will have to see. Also, we’ll have to see what it means with regard to bank cards and bank card operations. What we’ll have to change, if anything, with our rates in our case and for other market participants and whether we’ll be able to carry over the effect of the VAT introduction onto an increase in our rates, in our fees. Also the VAT refund. Will it be possible or not? If not, the increase in the rates might be more painful.

This may mean customer attrition, customer churn. Before the Investor Day, we will have to find answers to all these questions. As part of the conference on December 10, we will tell you about our strategy and the impact that we expect it to have on the metrics in 2026. If we assume the effects of these rates of this tax introduction ourselves to spare our clients, this will affect the net fee and commission income in 2026. Thank you. Next question, Yulia Koskina, RBC. Yulia, we cannot hear you. I think your microphone is muted. Okay, we can skip Yulia for now. Let’s try Katerina Litova from Vedomosti. I’m going to read the question instead of her. The cost of risk in September and October this year grew 2.5%. In the third quarter, it grew to 1.4%.

When do you think the cost of risk will stabilize given the situation in retail? What about the non-payments in the corporate segment? In general, I think I’ve already answered the first question. Those are different trends. The peak with non-performing loans, I think, is still to come. With the loans for which we already have reserves and provisions and for which we see risks, the non-performance, I think, might increase. As for the cost of risk, we do believe that in the second quarter, we already overcame the peak. As for non-payments in the corporate segment, across the market, we see that the non-payment trend is persisting, is increasing. As I said, in September, we have an uptick in demand for funding for loans for their turnover financing. This relates primarily to small and micro businesses, which receive payments from their larger counterparties slower.

This negative trend persists and is developing. We have concerns about the situation because the speed of payments and the possibility of a company to promptly pay for goods and services is one of the main parameters reflecting the healthy state of the economy. We would like to consider metrics which would reflect indicatively this trend and maybe add them to Sber Index. We’re working on it at the moment, and if anything comes out of it, we will definitely tell you about it. I think it may be good for the market.

Unidentified Speaker, Senior Management, Sberbank of Russia: Thank you very much. To wrap up, here’s the question from Yulia Koskina, who asked us to put that question forward. Given the profit in three quarters, what are the chances of exceeding the net profit of RUB 1.58 trillion? What can we expect in 2026? Will you be able to increase the profits again? This year we earned more than in the previous year. Comparing with the same quarters of the previous year, we are going 6.5% quicker to achieve the larger profit. We obviously retain our expectations. The profit will be higher than in 2024. That is needed to ensure the capital adequacy ratio. Otherwise, we won’t be able to achieve our own forecast. That is the overall trend, I would say, in terms of the profit growth quarter by quarter. We wanted to maintain that, and we will. Thank you. Thank you very much.

This is the important message to end our conversation on the results in nine months. We will welcome you to our next events. The nearest one will happen on the 10th of December. Please use the Telegram channel to get the information. Thank you very much, and thank you for listening. Bye.

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