Page 96 - RusRPTMar21

with high NII. CFO’s comments on stronger asset quality outlook are supportive.
8.1.8 Bank news
Tinkoff Bank has published December and hence 2020 RAS data.
December was a super strong month both for earnings and balance sheet growth.
On the earnings side, Tinkoff Bank earned R6.4 bln net income in December, taking full-year 2020 earnings to R36.9 bln, +34% y-o-y. We caution as usual about the read-through to IFRS (due March 11), but as we understand the strong earnings have been driven by good asset quality on the credit side, the bounce back of lending, and very strong brokerage and debit cards on the fee side. As a side note, MOEX published retail brokerage data today that showed a record over 625k new retail brokerage accounts opened in January, taking the total to 9.4 mln. This gives a positive read-through into 2021.
On the balance sheet, the standout was 9% retail account growth in December, bringing the 4Q20 total to a whopping 21% Q-o-Q, and full-year 2020 growth to 53% (compared to banking sector retail deposit growth of just 8% in 2020). December is always seasonally strong, but the 4Q20 and full-year 2020 numbers highlight the success of customer acquisition over the past several months, with total customers increasing in 4Q20 to over 13 mln, from 12.1 mln at end-3Q20. Loan growth has continued to recover too, with 2.9%/3.8% m-o-m gross/net loan growth, bringing 4Q20 gross/net loan growth to 7.8%/9.8%. This implies 2-3% upside to our 4Q20 IFRS loan growth forecasts. Full-year 2020 gross/net loan growth came in at 16%/13% y-o-y. On the capital side, CET1 was 10.1% as of January 1, 2021, down 30 bps m-o-m following R5 bln dividend payment from the bank to the parent holding company.
All in all, the numbers look positive for a strong final quarter under IFRS for TCS (we have R12.5 bln net income, but loan volumes look stronger than expected).
VTB released its 4Q20 IFRS results, after, which CFO Dmitry Pianov gave a press conference to journalists and hosted a call with analysts. Net profit for 4Q20 was RUB16.2bn, 7% higher than consensus. VTB earned RUB75bn in FY20.
A much higher impairment charge than expected in relation to non-core assets offset both the beat in fee income and lower-than-expected loan loss provisions. The NPL coverage ratio was above 120% at YE20, several ppts higher than in 3Q20. NIM was stable q/q, as was the average asset yield.
Cost of risk was at 1.8% in 4Q20 and FY20, but VTB’s management expects it to drop below 1% in FY21. Together with an expected lack of sizable
96 RUSSIA Country Report March 2021 www.intellinews.com