Page 101 - RusRPTJun21

8.1.8 Sberbank news
In 1Q21, Sberbank’s ROE rebounded to 23.7% as the bank reported earnings of RUB 305bn.
The bottom line came 18% above the consensus forecast due to lower than expected provision charges. Management upgraded its FY21 ROE guidance to 20%, cutting the CoR outlook to 100bp. We consider 20% ROE as achievable either by solid non-banking revenue growth or 65-70bp CoR. We have updated our forecasts: our new EPS forecast is up 3-4% in 2021-22F, and down 3% in 2023F. Our new 12-month Target Price for ords is thus 2% higher at RUB 430. Given this implies an ETR of 50%, we reiterate our Buy.
Operating performance. NIM declined another 24bp QoQ as portfolio repricing accelerated and a change of asset mix augmented the pressure. Net F&C grew a moderate 6.3% YoY. Opex growth stayed under control (3.0% YoY) thanks to administrative expenses. Provision charges declined 85% YoY, driven by revaluations and a net provision release. As a result, the bank posted earnings of RUB 305bn (up 153% YoY), implying a 23.7% ROE.
Balance sheet. Mortgage growth accelerated to 24.1% YoY. However, the expansion of the corporate portfolio decelerated to 5.7% due to significant repayments. The share of term deposits was up again, to 65%, driven by the corporate segment.
101 RUSSIA Country Report June 2021 www.intellinews.com