Good afternoon, dear investors and shareholders and analysts. Welcome to our conference call dedicated to Sberbank's consolidated IFRS financial results for the first quarter of 2025. Today, we have with us Deputy Chairman of the Management Board, Taras Kvarcov. We will start with a presentation of our quarterly results and then take your questions. Please put your questions in our Telegram channel, Sberbank for Investors. Also, you have the QR code on your screen that you can also use to put your question. I would like to emphasize that the conference call is being recorded today, on the 28th of April 2025. The call may include the forecasts and expectations of the leadership, which may differ from actual indicators going forward. For more information on the risks, please see the disclaimer on the second slide of our presentation. Thank you very much.
With that, I will now give the floor to Taras.
Yes, thank you, Anastasia. Good afternoon, dear analysts, journalists, investors of Sberbank, everyone who is on the call today. Today, we are summing up the performance of Sberbank Group in the first quarter of 2025. Net profit in the period increased almost by 9% year on year, to a record of RUB 436 billion. The return on equity increased to 24.4%. Since the start of the year, we have acquired over 200,000 new clients, exceeding 110 million retail and 3.3 million corporate clients. By the end of the first quarter, almost 99 million people benefited from the hassle-free access through our single authentication system, SberID. Over the period, the number of users increased by 4.3 million, while the number of digital services supporting SberID exceeded 40,000.
Every month, the Sberbank Online App is used by over 84 million people, with this figure having grown by 900,000 since the start of the year. The service is accessed by almost 45 million active users every day, and the DAO/MAO ratio is 53%. In the first quarter, we expanded Sberbank Prime subscription options by adding electric scooter rental. Now, our users can join the service free of charge and enjoy a discount on their ride. The number of Prime subscribers grew to 22.7 million. For corporate clients, Sberbank has introduced a new SberBusiness Prime subscription. It enables business clients to use banking and non-financial services, receive discounts, and bonuses. You can configure the subscription in line with your business needs by selecting the required services.
In the first quarter of 2025, the Russian economy showed a steady positive trend, but the growth rate slowed down, including due to the consumer and industrial segments, where the rate decreased year on year to 8.2% and 7.7%, respectively. After a sharp rise in December, the income growth rate gradually stabilized. Household incomes, they fell by 1.4 percentage points to 16.5% per annum in the first quarter. The total payroll increased by 18%. The most significant wage increases were in the manufacturing industry, IT, and construction. The high cost of credit resources has limited consumption, with its growth slowing to 13.4% year on year, mainly due to the non-food segment, where the growth rate declined from 20% in 2024 to 13% at the start of 2025. This trend has been continuing. Now, about inflation.
Despite high inflation at the start of the year, a number of key indicators point to a mitigation of long-term inflationary pressures. With that in mind, we maintain our GDP growth and inflation forecast for 2025. Now, let's take a closer look at our financial performance. In the first quarter, net interest income exceeded RUB 832 billion, an almost 19% growth, mostly supported by the growth in the volume and yield of working assets shown in 2024. The net interest margin increased to 6.11%, which was due, among other things, to a change in the methodology for accruing subsidies under state mortgage programs in the first quarter. The demand for loans from corporate clients is mostly driven by large and major clients. In the other segments, the demand is significantly lower. In the first quarter of 2025, the corporate portfolio increased 1.3%.
If you look at real terms, net of exchange rate fluctuations, it reached RUB 27.5 trillion. We increased our market share to 32.6%. The main drivers of lending growth were housing, construction, and the oil and gas sector. The cost of risk for the corporate portfolio remained close to zero. For the total loan portfolio, we recovered provisions in the amount of almost RUB 7 billion, which was explained by debt repayment and a few methodological changes related to a revision of risk assessment models. Please see details in our reporting. In the retail lending, the first quarter saw diverging dynamics. The mortgage portfolio increased by 0.4%, taking into account securitization transactions, and reached RUB 11.1 trillion. The bank started to gradually decrease mortgage loan rates, while the majority of the loans were used for apartments and newly built properties.
Consumer loans continued to decline, pressured by tight regulation, which led to a decrease in the total portfolio volume by 5.8% since the start of the year. However, Sberbank has maintained its domination in the market. In response to the inaccessibility of consumer loans, in credit cards, we saw the opposite trend. The portfolio volume over the reporting period increased almost 5%, reaching RUB 2.5 trillion. The market share of Sberbank in credit cards over the quarter increased 1.1 percentage points and reached 54.1%. The car loan portfolio decreased 3.2% over the quarter to RUB 583 billion. The cost of risk in the retail loan portfolio increased amid high rates in the economy overall, tighter regulation, and a slowdown in the portfolio growth rate, reaching 3.3%. That is mostly explained by the growth in unsecured lending. Overall, the quality of the portfolio is showing a negative trend, enhanced by the seasonal factor.
The share of stage three loans increased by 40 basis points to 4.1% in the first quarter. Trends in retail unsecured lending contributed to that, as I've said, and there was a slight deterioration in the quality of the small business segment. The total cost of risk for the whole portfolio increased to 1.24%. Having said that, even this indicator is slightly better than our expectations. We predicted 1.5% for the fall 2025, and provision coverage of impaired assets amounted to almost 121%. The dynamics of funds due to individuals remained rather high. During the first quarter, their volume increased 3.3% in real terms to RUB 28.4 trillion. The market share of our bank in this segment increased by 0.4 percentage points, reaching 42.7%.
With deposit effective improving the liquidity of the banking sector, Sberbank and other banks were able to normalize the deposit rates versus the key rate of the Bank of Russia. However, at the same time, the average cost of individuals' funds increased 1.7 percentage points in the first quarter. The amount of, yeah, given this decrease in the second quarter, we are not to expect a significant growth of cost of individuals' funds and corporate funds as well. The amount of corporate customers' funds in real terms increased by 2.3% over the quarter, reaching RUB 16.9 trillion. The market share of Sberbank here was 19.5%, and the average cost of raising funds increased by 0.4 percentage points to 14.4%. Net fees and commissions income increased in the first quarter to 10.4% year on year to RUB 203 billion, which is generally in line with our expectations.
Our payment technologies have continued to develop rapidly. SberPay NFC contactless payment service is already successfully used by over 14 million customers, making over 7 million transactions daily. Payments by QR code became available not only domestically but also abroad. Belarus and Turkey joined the countries accepting such payments. In the first quarter of 2025 alone, clients made over 35 million payments using biometrics, which is more than the figure for the entire last year. Sberbank has been consistently implementing an operational efficiency strategy by integrating artificial intelligence into its key business and internal processes. Operating expenses increased 15.2% year on year in the first quarter, and the ratio of operating expenses to income improved to 26.9%. In the first quarter, we presented an improved version of our LLM, GigaChat 2.0. This update, among other things, led to a growth in the popularity of the service.
The number of users increased 43% over the quarter, reaching 17 million people, and the total number of processed requests exceeded 500,000,000. We're also paying considerable attention to creating tools that make it easier for programmers to work. Our Gitverse resource, which has already attracted over 90,000 professional users, helps developers quickly create and publish mobile applications using a Git code agent for automatic analysis and improvement of the source code, allowed to reduce testing time and improve the quality of projects. Due to the profit earned during the quarter, equity increased to RUB 7.6 trillion. Common activity tier one grew by 6.5% over the quarter, and the total equity grew by 5.2% to RUB 7.2 trillion.
Risk-weighted assets decreased 1.5% over the quarter to RUB 52.2 trillion against the backdrop of ruble strengthening, despite the loan portfolio growth and an increase in regulatory macro buffers in the retail portfolio. The density of RWA slightly decreased by 0.2 percentage points to 86.8%. Capital adequacy under N20.0 increased in the first quarter to 14% from 14.3%. Last week, the supervisory board recommended the shareholders to allocate a record amount of RUB 786.9 billion, or RUB 34.84 per ordinary and preferred share for dividend payment. The annual general meeting of shareholders is scheduled for the 30th of June. It will be held for the first time in a remote format, with an option for absentee voting. In conclusion, we have passed the first quarter with considerable success, and at this stage, we are maintaining all the earlier forecasts for 2025.
We don't see any need to forecast as of this time. Thank you very much for now, and I'm ready to take questions right now. Thank you very much. We are proceeding at a brisk pace, so dear analysts, if you would like to put your question, use the response button in the program, and I'm going to note your raised hand and invite you. If you need any questions, Alfa- Bank, you have the floor now.
Yes. Good afternoon, Taras and Anastasia. Thank you very much for the presentation. Congratulations on great performance. Several questions from me. Perhaps I'll go one by one for your convenience. Question one, the net interest margin. We are seeing that in the first quarter, it has been performing much better than the full-year expectations and probably better than the previous year.
In light of this, do you maintain a positive sensitivity to the growth of interest rates that we discussed during the previous calls? Are you taking any action at the moment to reposition your balance structure for the future cycle of the rate?
Yes, Evgenia, thank you very much for the question on the margin. We should accept this recognition. Yes, we are performing a bit better than the forecast, but going forward, the potential for not being that pessimistic is there. As for the sensitivity to the rates, at this time, we have a positive sensitivity about RUB 18 billion. Having said that, we are looking to bring this value to zero, and the payment of dividends will contribute to the lowering of sensitivity in light of the expected decrease in the rates.
We don't need to keep a big sensitivity, and the whole action plan is about management of this indicator towards lowering it. Right now, it seems to be the most sensible strategy to pursue.
Yes, thank you very much. The next question on the credit quality in retail, especially unsecured retail. We see that this is probably the highest rate over the past couple of years. What trends are you seeing? How complicated is the servicing of the loans, or should we read the performance in the first quarter? Perhaps like this, they are reflecting your negative scenario. Starting from the second quarter, should we be seeing a lowering of the cost of risk?
Yes, indeed. Our forecast for 2025 and the performance of the first quarter show that the credit portfolio quality, especially in the retail, has been negatively affecting our performance.
This is a dubious situation. On the one hand, we are seeing rather good performance on the mortgages, and we do not have much deviation there. As for the previous year, as for the previous year and what we could have expected, on the other hand, in unsecured, the quality has been deteriorating. It has been deteriorating. It was deteriorating in all of last year, especially in the second half, and in the first quarter, the trend stayed. It is appreciably so. We understand why it is happening. That is explained by the higher rates. It is a natural selection of the clients. The good-paying clients are not particularly keen to borrow more, and those that are not 100% willing to pay, their percent in terms of the overall volume has been growing.
In the first quarter, what we saw was some exits, some fallout into NPL, not just on new loans, but good loans with some maturity. We are obviously taking action in response to such trends, and we are trying to mitigate this incoming flow. We are trying to mitigate this negative trend for the incoming flow of loans. All of these actions take effect over the midterm. In a month or in a quarter, you can't really see much effect. For 2025, we are not seeing much improvement in terms of portfolio quality. In all likelihood, the projection that we gave, we'll see us stick to it. As our action is taking effect and as the rates are going down, we expect a stabilization of the portfolio quality to the level seen pre-rate increase.
The situation is, like I have said, but with a great marginality and with good management. In some situations with restructurings, with smart recoveries, we are trying to invent all kinds of new efficiencies to benefit both the bank and the customer. We are trying to lift the pressure from this factor on our financial performance.
Thank you. There was another question. Yes, there was another question, the last one for today, about your track with the blocked assets. We see that the Bank of Russia has tightened its approach. At the same time, the new U.S. administration, with all the processes that accompany this new administration, given all that, your work with the blocked assets, has it changed in a way? Can we expect the positive effect on your P&L from that story?
As for the blocked assets at the end of last year, as for the changes and clarifications of the Central Bank of Russia in line with the law 222, this instrument has become negligible and non-accessible for us. As for the blocked assets, we're working as part of the standard processes for the reconciliation. We have been working on that in 2022 and 2023 and the previous year. Every quarter, as part of these initiatives and activities, we decrease the share of our blocked assets in our portfolio, and we are going to continue to do that regardless of whether we are going to factor that in the portfolio contribution. There are no major radical changes or some unexpected trends that we are expecting. We are committed to that effort, and the Central Bank, in terms of the assets, is also making the exchange.
We are participating in that. Looking at our large portfolio and provisions that we create for that, it is but a small share, so it cannot really radically change our results. Our cost of risk factors in all these potential measures, but we have been working with the central bank to that end, and we are going to work for all assets that are blocked, and we are committed to making sure that we return the blocked assets to the bank. Thank you.
Thank you very much for your answers. Thank you. Olga Nadyonova from CTNR will have the next question.
Olga, please make sure that you press the unmute button, and we are waiting for your question. Okay. Maybe next question then. Svetlana Aslanova from LEN.
Yes. Hello. You hear me all right? Okay.
Thank you very much for giving me the opportunity to ask the question. A couple of clarification questions, really. You have said that the share of loans for the floating rate is in line with the indicators on the presentation. Given the NIM, what is the share of the state-supported mortgages in your portfolio? The other small question, if I may, if we remove that change in the methodology and I'll put it in the other way, how the change in the methodology changed the curve of the NIM in Q1?
Svetlana, in terms of the mortgage loans, the share of the state-supported mortgage loans is increasing gradually. For example, for new properties, it's 99% that is state-supported. Basically, all the mortgages for the new properties are state-supported.
As for the second-hand properties, the government has included a number of regions in the program and included some options for the second-hand properties. The share of state-supported mortgage programs is around 70%. Overall, the share of the state-supported mortgages in our portfolio is growing. As for its pressure on the margin, I'm talking about the methodological factor that we factor in the share of the state-supported mortgage. It's easy to calculate. I would like to say that the level of the margin is in line with the level of the margin in Q4. That's a one-off event, and in the next months and quarters, we will not see that.
Thank you. Thank you very much. I have another question. Now, you have answered the question about the blocked assets. What about the immobilized assets? It is possible that these parts of assets will face harsher restrictions.
Will the group have to sell some of the assets in some time? How can it affect the financial result?
Thank you. It's an important topic. That is true. We can see that the banking sector is pretty nervous about this regulation. Now, there are a couple of things to consider here because, first of all, we're talking about the methodology. How do you calculate that? There are some things that are not very clear. We're talking about, for example, the hardware that is needed by the banks. How do you factor that in, like the data centers and the software? No bank can not invest in these assets, including the intangible assets. So that's the first thing. Secondly, how does this affect that? If we take the current situation, the calculation is done based on the volume of the capital.
The more capital the bank has, you can look at that based on the capital adequacy ratio. The lower CAR the bank has, the more challenging it is to meet these requirements. In terms of systemically important banks, Sber holds a special place because we are committed to prioritizing the capital adequacy ratio. We are not going to be those who will suffer from this new regulation. At the same time, we are actively working with our regulator to improve the methodology, to make sure that it meets the goals that it was intended for, to decrease the investments of the financial sector in some kinds of assets.
At the same time, the banks have to invest in IT and other things that are vitally important for the entire banking sector to work, and so that we can pave the way for the future developments of the banks, not for one, two years, but for decades ahead. Investments of the banks in the software and other things are very important. We are going to continue working with the regulator as the methodology is improved and revised.
Thank you.
Thank you, Svetlana. Olga Nadyonova, please. Please make sure you switch on the mic.
Can you hear me now? Yes. Thank you. Thank you very much for that call and for the Q&A session. I congratulate you with the great result. A couple of questions. One about the margin. You said that it is related to the change of the methodologies and the accrual of the subsidies.
Is it a one-off factor, or is it more of a continuous trend that we're going to see? The second question is about the credit quality, the loan quality. What do you see in the corporate loan portfolio, and how have your expectations changed in terms of the quality of the portfolio in the corporate segment? Another question about the insurance business. The result of the insurance business in Q1 is a bit worse than we have accustomed to. What is happening in this business line? Are there some one-off factors, and what can we expect in insurance? Thank you.
Olga, thank you very much. As for the margin, it was a one-off factor. We do not think that these measures are necessary in the future. Our margin is pretty easy to forecast, especially if you look at our quarterly reports.
Starting from March, April, and May, you will be able to use the Russian accounting standards and indicators as the benchmark, and there will be no one-off factor. As for the quality of the corporate loan portfolio, Q1 is a kind of deviation because we're not going to continue to replenish our provisions. We expect the quality of the corporate portfolio to stabilize in the next quarters. Given the methodological factors, our cost of risk is going to be within the range that we accept. The small and micro businesses segment is flourishing right now. It started last year. The rates are high, and usually, not everyone has the resources for repaying the debt, so the number of defaults is growing. If you talk about the medium and large and major businesses, there are some one-off stories there.
You can't really say that there are some industries that are of particular concern, yet there are some industries where our clients are not in the best situation. We use stress tests to forecast that and to provision accordingly. It's like the situation that we faced in Q1. The situation in the economy deteriorated to rate. There was a rate hike. At the same time, the quality of the portfolio in terms of the cost of risk was better than forecasted. Why? Because we beforehand have created the provisions and used the models to create proper provisions based on the new methodology. In the second half of the year, in the remaining quarters, we are going to stabilize this indicator, and we expect some problems, but we do not expect some major deterioration of the portfolio in terms of the corporate portfolio. Overall, it is true.
For now, we can see that according to data, we were a bit more pessimistic in terms of the corporate loan portfolio forecast compared to the actual result that we have seen in the last three, four months. As for the insurance, it was not ideal in terms of the reporting, how it reflects the real situation with the insurance business. There are some nuances. The major part of the insurance businesses is reflected in the trade and interest-related yields, income. If you summarize the situation with the insurance business, there are no negative things there, no negative trends. In terms of the profits, in terms of other indicators, the Q1 results are in line with the Q1 results of 2024. You can compare that.
In terms of the contribution of our subsidiary companies, our insurance company is the one that drives the additional profits and contributes to the overall group profit. The business is growing in line with our plans. We're pretty happy about it. We are quite sure that in Q2, in the second half of the year, we're going to focus on it more to make sure that it delivers better results. If you look at the reporting, you have to understand that some parts of its profits are reflected in other parts of the book. Thank you very much, Olga. A couple of other questions from our listeners. The question about the forecast of the corporate loan portfolio growth. Your forecast is 11%, and at the same time, in Q1, it was -1%. What are your expectations?
From what point and in what industries do you think we'll be able to drive your previous more optimistic forecast? When we gave the forecast, we looked at the real dynamics of the portfolio. If the ruble strengthened from RUB 102 per $1 to RUB 80 per $1 or RUB 82 per $1, obviously, that differentiates the indicators in nominal and real terms. We had a growth of 1.3% for Q1 when it was a pretty good time for the borrowers. There was a lot of balancing of the federal budget. There were huge accruals to the physical persons who made their purchases. In Q1, that really was driving the corporate segment. In Q1, not many clients wanted to take a loan. That was okay.
In Q1, we grew by 1.3%, and we think that overall, in the second half of the year, we have a higher demand for loans. The key rates, obviously, strengthen this desire of customers to wait and see before taking out a loan from the bank. Everyone is expecting the key rate to go down, and we expect that as the key rates go down, the demand will be revived because that's a possibility. That is one factor. On the other hand, there are expectations that the rate will go down. We think that 9-10% is a pretty realistic figure that we might see by the end of the year. Thank you very much. Another question is about the state-supported mortgages that the bank is actively working on. Removing the commission for the developers, how will it affect the results of the second half of the year?
Yeah. We introduced the fee in response to several factors that made this a loss-making business. The main factor, perhaps, was the significant increase in the rate on deposits and the overall cost of funding, not just for the deposits. It's just easier to track the deposits. It's always in the ads. It's in the media. On the corporate customers, it was also the same trend. Secondly, it was a tightening regulation, which, especially in the low-down payment segments, consumed a lot of equity on the part of the banks. In the first quarter overall, specifically due to the liquidity sector stabilization, we saw the corporate rates go down. The key rate apparently stayed at the same level, but the differential between the funding cost and the key rate went down. This first factor was largely negated.
We brought the fee amounts down, and we see it equated to nil at some point in the future. The second factor, the pressure on equity of the banks, is staying, and the central bank has not been taking any action with respect to that, so far as we can tell. In all likelihood, and I'm talking about the market in general, all of the banks are working with the fees because the economy works for everyone. All the banks are likely to limit the disbursements of loans in some fashion. The loans with small down payment where they see too much equity pressure. This is probably a trend towards a general decrease in mortgages, new mortgages. You could have done something, and the banks would have kept zero fees. As things go, either it's a fee or it's a rejection of some borrowers.
The situation has been changing. The government went to accommodate the borrowers. The term of the subsidies for the state mortgage program was increased. We are maintaining a dialogue with the government, with the central bank. Everyone understands the importance of the mortgages for the economy, for the construction sector, for just helping the people to improve their residential situation. I think some decisions will be made here, and in some fashion, it will be a positive trend. In some fashion, everyone is trying to see we projected new mortgages to decline year on year, but it can't continue this way. Everyone sees some kind of an improvement down the road. Elsewhere, the mortgages are one of the key markets. We have a big market share. We have a big share of the projects on the corporate side.
It is very important for us to see and we have been trying to work with all the stakeholders to improve the situation. Thank you. Yeah. One more question from the same channel. Has Sberbank been planning for an optimistic scenario, perhaps with the sanctions getting lifted and where the most important effect might come from? We have been looking at all kinds of scenarios. When we talk about the lifting of all the limitations, we have so much restriction. We have so many restrictions on the banking sector, on the economy, imports, exports. Importantly, all those restrictions were implemented by various countries and various packages. We have some assets blocked, and we made some reciprocal restrictions. It is a bouquet. Unraveling the whole thing, it is too optimistic to see everything getting lifted. Only fairy tales see scenarios like this.
We can only see a gradual improvement of the situation. Until the restrictions of the central bank assets are lifted, there will be no other restrictions lifted on equity flows, etc. What we would like to see is the lifting of settlements, at least, which has been materially affecting the actions of our clients and the bank overall. If that happens, that will be probably the first important step for us to see a certain effect both in the economy overall and in the banking sector performance. There are so many sanctions that even this scenario, seemingly small scenario, would be difficult. That really beggars belief to date. Do let's see how things unravel. If the sanctions are lifted, the positive effect on our bank and the sector will be there. Thank you very much. Now we're passing over to the journalist's questions. Ms.
Szpilewska, do you have the question? Your mic is on.
Yes, two questions. This year will be obviously less than simple for the banks. Do you think Sberbank might breach its own record? The second question, when will the mortgage commissions be lifted for the subsidized mortgages?
Yes. For the first month, we have seen a less than simple situation. You can't grow the profits as optimistically as last year in the sector overall. Yet the performance in the first quarter was better than in 2024. For the equity margins that we wanted, we are looking to do what we promised. Our policy states that we intend to pay out 50% if we achieve capital adequacy at at least 12.4%. For the first quarter, we saw a considerable improvement.
Before we make the payment, we would like to—we have to improve the adequacy a little bit more, so we recompense. There are a lot of externalities: the ruble exchange rate, the dynamics in the securities markets, especially in the bond market, how the loan portfolio grows, how the key rate emerges going forward. We can't promise in advance, but we will certainly be trying. We have a three-year strategy, two years out of three. We are stuck with the dividends. We gave the recommendation. Hopefully, the AGM supports our recommendation. We will try to do the same thing in 2025 on the dividends. As for the fees, I think it's somewhere in the offing. There is some decision on this account. We are doing the discussion with the government, with the other banks, how and when this can be done.
When the actual decision is made, we will implement the lifting of the fees. Anastasia Saveliva, Interfax. The next question, please.
Hello? Can you hear me? Yes. Yes. Right. We are certainly not revealing it, the performance of your non-financial business, but could you give us at least a flavor of whether it is still loss-making or perhaps in some future timeframe, you see the non-financial business generating some profit? That is the first question.
Yeah. We are working in a slightly different format with the non-financial companies. We are working with them as partners, and we see their performance improving generally. They did improve last year. They improved rather well in the first quarter. I think every business is trying to break into a profit, and those companies are no exception.
This is certainly a goal, and we will certainly be helping them in every way we can. We have certain investments in the business related to client loyalty. A lot of clients find it important to get non-financial as well as financial services from the same source. Those services are part of the prime subscription. Those non-financial services are also mandatory for us in light of the current trends. We are incorporating those non-financials in our overall reporting one way or another. As we go forward, we see the situation improving both for the companies themselves and for our investments. I can't really give you specific figures, but the overall trend is a good one. Generally, all those companies will gradually break into profit.
Yeah. Yeah. I've got another question. You responded to it in part. Yeah. What is your expectation regarding the loan portfolio quality? You said that you will broadly hit the targets of 2025. On a quarterly basis, you do not expect a deterioration of the loan portfolio quality. The second question is, you said it many times that the prospects for the liquidity situation are not there in terms of improvement. Is it the same situation? Could you tell us how much has the FX share of your portfolio shrank?
Yeah. As for the loan portfolio, it is hard to add really anything to what I have already said. On the retail track, we cannot really exclude some more deterioration versus the first quarter because the NPL trends exhibit a considerable lag. What we see today is still the aftermath of 2022. As for the corporates versus the first quarter, there will definitely be a deterioration because you cannot maintain a good cost of risk for the entire year.
As for yuan, the situation generally stabilized. It normalized back in the end of last year. In the first quarter, on some market indicators, we did not see a day when the situation came close to the problems that we saw in September or October 2024. The rates are sticking to very low levels. The actions of the central bank really made it clear to the banks that it does not intend to fund the banks. The active operations, active transactions really saw the banks cut the lending in yuan. That really stemmed the deterioration driver. You can't really borrow in yuan these days. It's pretty difficult to borrow something significant. The situation is pretty stable. Yuan is generally used for settlements.
As for the balance of rubles, dollars, and other currencies, we have been continuously driving down the share of foreign exchange in our balance sheet. Right now, this is one of the information elements that the central bank precludes us from disclosing in our reporting. We have not really seen much interest on the part of corporate clients or retail ones in replacing the status quo in currency. All the growth in liabilities has been accounted for by rubles. The decline has been just stemming because some clients have been keeping their funds traditionally in dollars or yuan. Regardless of the rates, regardless of any movement in the rates or exchange rates, they just stick with those deposits and do nothing with them. These clients are staying there. We have not seen changes as radical as we saw in 2022 or 2024.
Yulia Koshkina, RBC, next question.
Hello? Can you hear me? Yes. Yes, we can hear you all right. Right. Thank you. You gave some assessment of the quality of loans in retail. Could you give us more detail about what vintages have been performing better or worse, and how can this be explained? Are those the rates? Are those the ones that were borrowed at high rates or not? How could you comment on the growth of share and volumes of NPLs and mortgages? You can see that the report has been showing some growth on this track, although that was not a dramatic growth.
When we talk about the shares or quality of the portfolio, stage three loans in various segments, as you have said it on the mortgages, that is affected by, among other things, the overall growth of the portfolio. In the first quarter, the gain was under half a percentage point. We traditionally saw more NPLs falling out in the first quarter. In the first quarter, the overall mood is perhaps not favoring loan repayments. Some people just physically forget to repay. We see the same clients catching up in subsequent quarters. If we talk about trends, we can't really see many. If people borrowed at high rates at the end of last year, earlier this year, they generally exhibit higher NPLs versus the clients that borrowed earlier.
Even those, we see some clients, they say this service and service, and then they just fall out and start non-performing. This is unexpected for us because we grew accustomed to those clients repaying half a loan. You did repay half a loan. Why not perform half? Why? Situations vary. Sometimes some people leave to serve in the army during the special military operation. We freeze interest payments for those. We do other things for those. The retail portfolio has been continuing to impact, getting impaired. On mortgages, it was more about private residences. Flats, apartments, especially bought with government-subsidized, those are more stable. Unsecured borrowing in credit cards too, there is considerable growth of NPLs. We had envisioned that it was generally in line with our expectation. We see that we think that there might be some more NPLs here.
That might happen over several quarters whereupon it will stabilize. Stabilize, it certainly will because our credit policy, our lending policy really responded to the situation. We are modeling client behavior better. We assess risks better, etc., etc. Thank you.
Thank you very much. Next question, Ekaterina Litova from Vietnam ST.
Just a question about the risk, the comparable level of risk for the NPL.
Our guidance was 0.5%-1.5%. We said that the cost of risk will not be higher than 1%. For the retail clients, it will be around 1.5%. It might be more than 2%. We think that we are in line with our guidance. Thank you.
Next question, Tatiana Boranova, Front Media.
Hello? I have a question and a request for clarification.
First of all, I would like to ask about the number of restructuring cases because there are said that the bank is committed to supporting the customers who require the restructuring of the debt. How often does it happen? What is the amount on average? Do you have the same practices for the retail? What is the amount of the loan? What will be the amount by the end of the year as a result? I'm talking about the restructured loans. Another question is that in your presentation, you see that the yields for some assets was growing slower than the funding yields. Are you going to reconcile that gap? Here, it's more about the margin. There was a question of Anastasia Sobelova about immobilized assets.
Starting from 2022, we have seen that the bank, to avoid some banks, including Sberbank, to avoid the sanctions, were changing shareholders. That includes subsidiaries of Sberbank. How are you going to form the portfolio of non-banking assets? Because formally, some of the companies are not owned by you now. What are you going to do about that? Thank you.
Thank you very much. As for the restructuring, if you talk about corporate portfolio, the share of restructured loans is more or less stable. There are some customers who come for the second and third times, but that's business as usual. Even if after restructuring, a client cannot service the loan fully, we, in advance, create the required provisions. As for the retail customers, the share of restructuring is growing. If you compare it to the end of 2023, the growth is like 0.5%, 0.6% maybe.
Saying that restructuring is a large-scale problem that will eventually lead to worse quality, no, it's not the case. We had some regulations during the coronavirus, for example, that required the banks to restructure. I mean, 80% of restructuring is done in line with these typical standard situations. Twenty percent are some of the individual things. I mean, we are personalizing the customer experience for that. I mean, it's pretty stable. It's pretty stable looking at previous quarters and this quarter as well.
If you talk about the liabilities, costs, and asset yields, here, it's very important to understand how they correlate with each other, the assets and liabilities, because the margin is formed not only from the yields and the costs, but it also is driven by the reconciliation of the credit portfolio, the loan portfolio, and the liabilities of the bank, as well as the overall portfolio. The margin reflects that. Given the trend to decrease the deposit rates that we have seen during the first quarter, we believe that the peak of higher liability costs has been passed. Even if there is some increase in the future, it is not going to be as significant as we've seen the first quarter. Obviously, it is going to help us to feel more confident margin-wise.
I mean, we started to decrease the rates for the mortgages, and we decreased the rates for other retail products. The corporate client rate and rates are lower than those of 2024. There is a reconciliation. The rates are going to go down gradually. This is how banks work. They have to ensure that they can work in whatever environment. The rates are low. The rates are high, super high, maintained at the same level. That is the market that fluctuates. We have to be in line with the market. We know how to do our business. Every year, we're making our work performance more efficient. As for the immobilized assets, that is not really the work of the bank because in terms of the capital adequacy ratio and in terms of the other indicators that are regulated, are monitored regularly, it is calculated properly.
No problems at all here. We're talking more about the methodological factors, like what should be included, how the immobilized assets should be calculated, and what share of the capital they account for. These are the questions that are more important than some subsidiary companies because usually, the major investments are made by the banks in their core financial business that help them to earn profit. Let's wait. The announcement of the updated methodology and the implementation period and deadline. I mean, we are going to calculate all of the ramifications and tell you whether it is a problem.
Thank you. Thank you very much. It's been the second hour that we have been working. Last question, Maria Nofio from RBC Investments. I'll read two questions. First, about the key rate by the end of the year. When do you expect the key rate to go down?
The second question is about the USD rate. Do you think that the previous several months formed the trend, a more long-term trend? As for the key rate, we have not changed our forecast. We expected the key rate to go down in 2025. We think that it will happen in the second half of the year. There will be one or two decreases to the level of 19-19.5%. As for the USD rate, in our basic forecast, we expected it to be around RUB 100 in 2025. The current appreciation of the ruble is, in many ways, driven by the external political factors. It is very hard to predict what will happen next. Currently, we are in line with our expectations. Recently, we have seen a forecast from the government. They also forecast that USD rate to be around RUB 100 per one USD.
I think we're on the same page here. Our expectations are in line. What will happen, actually, and what will be with the sanctions regime, what will happen with the trades after the possible easing or potentially tightening of the sanctions is very hard to predict because the current FX market has become very defragmented. This is the structure that makes it hard to predict the rate because even one deal, one small action by small, I mean, if you compare to the things that we had in 2021, might lead to a major decrease or increase of the ruble. Like in one day, USD rate might go up and down by 1, 2, 5, 10 RUB. This is the situation that we are facing right now.
We are committed to ensure our FX risks so that if the ruble is depreciated, we do not face major negative consequences. Our benchmark is RUB 100 per $1. Thank you very much. We are closing our session. Thank you very much to all of the participants. Thank you for your exciting questions. I would like to thank all of the Sber team who made this call possible. We'll see you in a quarter. Thank you. Bye.