Page 66 - RusRPTJan22

Sberbank had a great 2021 that was very robust – net profit surged 66% y/y to a record RUB1,260bn, ROE posted a solid 23.3%. Moreover, initial 2021G proved to be quite conservative on NIM and CoR – with a positive skew from a higher interest rate on NII – and on asset quality recovery. Thus, we see 2021 NIM to compress by 17bp vs 50bp initial expectations, implying a -54bp 2020-23 change to BCSe vs the -80-100bp projected in the 2023 SBER Strategy. CoR was another stronger than expected development, albeit the COR was generally quite conservative and we note a still high concentration with the top-20 borrowers accounting for 42% of corporate loans. We see CoR at 64bp for 2021 and ~100bp by 2023 – mostly in-line with SBER’s 2023 Strategy.
Non-financial businesses strong, requiring additional OpEx. SBER’s non-financial businesses in 9M21 enjoyed abnormal rates of revenue growth (+183% y/y in 9M21) mostly led by e-commerce (+831% y/y 9M21. SBER’s wide customer base of 102.8mn and 3.0mn corporate clients drove MAU and DAU to 71.3mn and 35.7mn, respectively, for SberOnline with new services and SberPrime subscriptions attracting higher interest. The high growth naturally required investments – OpEx of non-financial businesses grew by 3.5x y/y 9m21 vs 15.1% y/y for the Group. We believe the Group’s 2023 targets on stable financial CIR for SBER are quite reachable at 9% CAGR vs 13% BCSe for OpEx.
Capital levels strong – 50% dividend payout to be maintained. We see solid capital levels post a strong 2021 – i.e., record net profit helping boost 2021e CET1R 42bp y/y to 14.3% and total CAR 61bp y/y to 15.3%. A strong 2023e CET1R of 14.6% and 15.1% total CAR ensures at least a 50% dividend payout. Higher payouts look possible, but are subject to further non-financial businesses investments that are currently guided to account for 7% of capital in 2020-23 years.
Sber (formerly known as Sberbank) presented its 2023 Strategy update during the Investor Day.
Management increased its 2022-23 ROE guidance to 20+% and >23% for 2021 from the initial guidance of 17+% on the back of higher NIM and lower CoR. With a full house of ecosystem blocks now in place, Sber’s focus shifts to scaling up (opex to grow at 15% pa in 2021-23) together with optimising capital allocation, which is logical given the looming ecosystem regulation. The FY22 guidance is achievable, in our view. Our new 12-month TP for ords is down 8% to RUB450, as adjusted 2021-23F EPS declined 3-10%. Buy reiterated (72% ETR).
Ecosystem development. Management sees a strong performance from the e-commerce business in the ecosystem and might merge some of those assets to optimise costs. The 2021 guidance for
66 RUSSIA Country Report January 2022 www.intellinews.com