Page 73 - RPTRusFeb17

Net IFRS profit of Russia's largest bank, state-controlled Sberbank, surged 2.4-fold year-on-year to record-high RUB541.9bn (€87.8mn) in 2016 , the lender reported. Throughout 2016, Sberbank's profit made the lion's share of sector's total profit, with the bank leading in terms of deposits. Sberbank's profit beat the RUB519.3bn consensus forecast compiled by RIA Novosti. In the fourth quarter alone, Sberbank made RUB141.8bn, doubling year-on-year and inching up 3.5% quarter-on-quarter, also beating RUB119bn consensus expectations. Sberbank boosted net interest income by 20% y/y in 2016 to RUB355.2bn, while cutting the procurement to reserves by almost two-fold from RUB112.3bn to RUB57.7bn. This made the cost of risk contract to 122bp from 230bp in 2015. Net interest margin of Sberbank increased from 4.4% in 2015 to 5.7% in 2016. However, Sberbank's total credit portfolio before reserves declined by 6.3% to RUB18.7 trillion, with the share of the non-performing loans reduced from 5% to 4.4%. In 2016, retail deposits in Sberbank gained 3.4% to RUB12.45 trillion, while corporate deposits scales back by 19.6% to RUB6.235 trillion.
Russian state-run lender VTB on March 1 reported modest IFRS results for October-December, with net income amounting to just RUB17.5bn (€284.2mn) in October-December and RUB51.6bn for the entire year 2016. Commissions and nonbanking business were the main bottom-line drivers, according to analysts. Interest income came in slightly below expectations amid a stable quarter-on-quarter margin of 3.9%, although this metric was offset by strong commission income and non-banking business. Provisioning, including other assets and bank guarantees, totaled RUB47bn in October-December with CoR of 2.0%. Loan portfolio quality improved (NPLs 6.5%) amid heavy write-offs and the positive effect from a stronger ruble. The lending portfolio contracted 1% q/q amid a decrease in corporate loans (-2%) and an increase in the retail segment (+3%). The lender's funding structure showed a significant outflow of corporate deposits (-12% q/q), mainly attributable to deposits of state-owned companies, which VTB managed to offset through funds from other banks and the CBR (+RUB 300bn q/q). "Overall, VTB's main credit metrics remained stable: asset quality improved mainly due to write-offs, while capital adequacy remained at a high level," Gazprombank said in a research note. "We only note changes in the funding structure, which are likely of short-term nature." "We confirm out negative outlook on VTB as the lender has been showing a weak ROE and its shares are overestimated," BCS said, adding that the lender's net revenue in 2017 is expected to reach RUB86bn.
Tatneft is planning to increase its stake in the authorised capital of Bank Zenit to 74.2% by converting the company’s subordinated loans amounting to RUB 9bn ($156mn) into Zenit’s shares, Interfax reports. Tatneft sent an application to the Federal Anti-Monopoly Service to receive approval for the deal at the end of January. In June 2016, Tatneft acquired a 34.28% stake in Bank Zenit paying RUB 6.7bn.
Russia’sdefactosovereignwealthfund,theR ussianDirectInvestment Fund (RDIF), will receive and additional $1bn capital injection in 2017, Reuters reports . The RDIF was set up in 2011 to buy stakes in companies alongside foreign financial and strategic investors and is allowed to invest up to 20% of its capital outside Russia. Technically part of Russia’s de facto development bank Vnesheconombank (VEB), RDIF has been made independent following the near collapse of VEB in 2016. Under the original scheme the RDIF was supposed to get $2bn a year from VEB and use the funds
73 RUSSIA Country Report February 2017 www.intellinews.com