Page 67 - RusRPTMar20
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As RBC editor Ivan Tkachev discussed in an interesting article, during the crisis years the government ordered the CBR to send all of the dividend payments to the government. The transfer of the asset to the state will clean up this arrangement and make the payment of all of Sberbank’s dividends to the budget a permanent arrangement just as Sberbank is expected to increase its dividend payments to 50% of net profit, making it one of the biggest dividend contribution to the budget.
Sberbank January results reports strong loans and net profit up +9% year-on-year. Sberbank released 1M20/January RAS financial results. Record loan issuances and good NIM levels support positive fundamental view.
Despite weak seasonality in January Sberbank showed record loan issuances of RUB1.1tn (5% of portfolio) and flat NIM at 5.9%, we expect to show improvement in future months. We treat results as positive.
NIM came mostly flat at 5.9% level, supported by growing retail loans in the portfolio and on the back of NII growth to RUB111.5bn (+9% y/y).
Loans issuances both in retail and corporate were high despite long holidays in January and usual low activity – RUB874bn corporate (+31% y/y) and RUB258bn (+16% y/y). Corporate portfolio was unchanged due to redemptions with retail loans grew by 17% y/y.
Deposits were mostly in trends of beginning of the year with retail down -3% m/m, but +5% y/y and corporate accounts +1% m/m, -8% y/y.
Fees came strong +23% y/y, driven by cards and corporate transaction businesses. Yet, adjusted for methodology change the growth is +15.4% y/y.
CoR came higher at 1.5% in January, affected by FX move with NPLs stable at low level of 2.2%.
OpEx growth is showing deceleration in January +4.5% after 8% growth in 2019. CIR looks good at 25% level.
CAR levels remain strong at 10.5% for N1.1 and 14.1% for N1.0 with earnings for April 2019 – January 2020 to be included post the audit.
Russia’slargestbankS berbankwillhaveacontrolling50%plusone share (52.3% stake in ordinary shares) transferred from the Central Bank of Russia (CBR) to the sovereign National Welfare Fund (NWF), the regulator announced.
The CBR commented that the transfer will eliminate a current conflict of interest with the central bank acting both as shareholder and regulator. The transfer will take place as a sale at the market value to the NWF.
Notably, the CBR will make a mandatory offer to minority shareholders at the price of the deal. BCS Global Markets on February 11 assumes no offer to preferred shareholders, as preferred shares are 100% free-float and not a part of this deal.
BCS GM treats the news as neutral, as Sberbank’s ownership (52.3% in
67 RUSSIA Country Report March 2020 www.intellinews.com
