Page 105 - RusRPTJun21

There are also plans to further integrate the expanding ECM/DCM teams into the asset/wealth management offerings.
Bank of St Petersburg published solid 1Q21 IFRS results. It was a solid first quarter, with earnings in line and 10.6% ROE, which leaves the bank nicely on track to meet our R10.6bn 2021 net income forecast, particularly given the first quarter is seasonally fairly weak. The management slightly raised its 2021 guidance, increasing ROE to above 12% from 12%, helped by cost of risk dropping to below 2% from 2%. Loan growth guidance was raised from 10% to 12%. Net income of R2.4bn was up 51% y/y but down 47% q/q, with 10.6% ROE, in line with our forecast and the consensus. NII was impacted by lower NIM. NII was up 4% y/y but down 10% q/q, while fee income was up 12% y/y and down 16% q/q. Trading revenues were R0.6bn. NIM was down almost 50 bps q/q at 3.7%, driven by a more than 1 pp drop in average loan yields, which was in part a reflection of some one-offs in 4Q20 as well as loan growth coming toward the end of 1Q21, which sets interest income up nicely for 2Q21. Cost of risk was 1.9%, with just 1.1% in retail but corporate rising quite strongly to 2.2% due to the transfer of some corporate loans negatively affected by the Covid pandemic from Stage 2 to Stage 3. About 70% of macro buffers were released in 1Q21 (so leaving about R0.8bn). Costs were decent, up just 2% y/y, but the management is guiding a pickup to 10% in 2021. Corporate loans rose 6% q/q (helped a bit by ruble weakening), while retail rose 4%, with over 6% consumer loan growth as issuance picked up pace.
8.2 Central Bank policy rate
There was no meeting in May. The prime rate remains at 5% and more tightening is expected over the rest of this year of 50bp-75bp.
105 RUSSIA Country Report June 2021 www.intellinews.com