Page 72 - RusRPTJan22

Tinkoff’s management sees its retail loan book growing at a CAGR of 20% for the next three to four years.
We think the event should have a positive impact on the stock thanks to Tinkoff’s ambitious growth plans and a hurdle rate/IRR of 30% for almost all its loan products. Although some of Tinkoff’s lending products were only launched recently, Tinkoff has a successful track record of expanding into new segments, and it is such new segments that largely drive the projected CAGR of 20%.
8.2 Central Bank policy rate
CBR raised the key rate 100bps on December 17, in line with market expectations.
Although inflation is running above the target level, monetary authorities are committed to bringing it back to 4-4.5% by YE22.
The persistent factors are likely to weigh on the inflation trajectory, and elevated inflation expectations could force CBR to take additional steps to bring the inflation trajectory back to its anticipated route.
Sova Capital’s baseline scenario assumes that a further 50bps adjustment could be necessary in 1Q22. However, analysts believe that Russia is at, or close to, the end of the tightening cycle.
The CBR highlighted the lack of improvement in the inflation backdrop while reiterating its 2022 inflation forecast of 4.0-4.5%, keeping it unchanged for the fourth straight meeting.
All this signals that the CBR will do whatever it takes to normalize inflation next year, which will likely require further front-loaded tightening.
The most notable change to the wording of the press release was in the main message of the CBR. It now states that "... the CBR holds open the prospect of a further key rate increase [note: singular] at its upcoming meetings," whereas the October version was that "...the CBR holds open the prospect of further key rate increases [note: plural] at its upcoming meetings."
This probably reflects growing confidence on the part of the regulator that most of the needed hikes are already past. However, CBR Governor Elvira Nabiullina, speaking at the press conference, said that multiple further rate hikes may still be needed, though the probability of that is lower than in October.
72 RUSSIA Country Report January 2022 www.intellinews.com