Page 94 - Russia OUTLOOK 2023

“The releases still lack some important lines, yet we see a strong trend of
October extended into November with net profit of RUB125bn and ROAA of
4%,” BCS GM said.

Core incomes proved strong in the last two months, with November net interest
income (NII) and fees of RUB216bn up 14% y/y thanks to stronger loan
dynamics in a lower interest rate environment as well as lower funding costs,
while client activity and acquiring growth supported fees, BCS GM reports.

“Importantly, Sber does not apply any of the forbearance measures introduced
by the CBR for 2022,” the analysts added.

The capital adequacy ratio (CAR) of the bank is above buffers set by the
board, and CEO German Gref indicated in the results that this makes dividend
payments for 2022 possible.

“While the press release lacked provisions and equity lines, it said that CAR
levels improved in November, exceeding management buffers set by the board
of directors in December 2021. More importantly, the CEO recently flagged a
return to dividend payments in 2023, as the bank returns to normal
functionality,” BCS GM said.

The cost of risk stayed low at 0.8% and 0.7% in November and October
respectively – back to pre-crisis levels with NPLs low at 2.3%.

The improvement in operating expenses was also welcomed by analysts as an
achievement and also supportive for the bank. OpEx was RUB64.3bn (0.3%
y/y) in November and RUB589.8bn (-4% y/y) over 11M22.

“We consider this cut in OpEx as quite an achievement, given it is hard to cut
costs for Sber, in our view,” BCS GM said.

94 Russia OUTLOOK 2022 www.intellinews.com