Page 67 - RusRPTApr19

cost of risk rose from -0.4% to 0.5% in 2018), while the cost of risk on retail loans was flat at 2.9%. Meanwhile, asset quality metrics improved, with 90d NPL/gross loans down from 2.3% to 1.4% y/y (1.3% for corporate loans and 1.8% for retail) and reserve coverage for such NPLs at 208% (183% for corporate, 283% for retail). According to the new standards, the wider category of stage 3 loans represented 3.4% of the overall loan portfolio, and reserve coverage for such loans was 87%,” Ekaterina Sidorova of VTBC said. The bank's Tier 1 capital was supported by the higher earnings and January 2018 issue of $500mn in perpetual Eurobonds. As of January 1, 2019, the local Basel 3 standalone CET1 ratio was 9.5%, while total CAR was 13.5%.
Leading Russian consumer lender TCS Group that operates Russia’s only pure online bank Tinkoff Bank reported a record-high net profit for 2018 thanks to rapid growth in fee and commission income, and approved an interim dividend payout, the bank said on March 11. TCS said its net income rose 27% to RUB8.1bn ($123.23mn) in the fourth quarter, up from RUB6.4bn in the same period a year earlier. In the whole of 2018, TCS’s net income rose 43% to a record high of RUB27.1bn. TCS Group’s strong year and quarter stood out from Russia’s wider banking sector, which has been shaken by the withdrawal of dozens of banking licences. “These strong results were driven by both credit and F&C (fee and commission) business lines, as we continued to expand our financial and lifestyle ecosystem, which now serves well over 8mn customers,” said Tinkoff Bank CEO Oliver Hughes, as cited by Reuters. TCS Group’s fee and commission income increased by 77% to RUB27.4bn in 2018. TCS also said its board of directors had approved a first interim gross cash dividend for 2019 of $0.32 per share or GDR, with each GDR representing one share. A total dividend payment would amount to $58.4mn, the lender said. Tinkoff bank has become an investor’s darling and one of the few Russian stocks to regain its pre-crisis IPO prices. Then bank’s stock was trading at $18.50 at the close of trading on March 11.
Russian Evrofinance Mosnarbank has been sanctioned due to its ties with the Venezuelan state hydrocarbon major PDSVA, the Office of Foreign Assets Control (OFAC) of the US Treasury Department (USTD) said on March 11 after adding the bank to the SDN List (Specially Designated Nationals and Blocked Persons). Evrofiance was founded in 1993 and has a branch in Caracas after in 2011 Russia and Venezuela agreed to set up a bi-national financial institution to finance joint projects. The bank is Russia's 78th largest in terms of assets. Venezuelan Fonden S.A. national development bank holds 49.99% in Evrofiance, while 25% plus one share are held by Russian state banks Gazprombank and VTB Bank and their subsidiaries. On Wednesday March 6 Evrofiance has stopped the rating coverage with Moody's Investors Service, withdrawing the B1/Not Prime long-term ratings. In October 2018 Bloomberg reported that Venezuelan authorities encouraged local businesses to use Evrofiance for international transactions. RBC business portal said on March 11 that out of RUB62bn of assets ($0.94bn) of the bank only RUB5bn were directly related to non-resident accounts, but non-residents account for RUB24bn of the liabilities. Previous reports also claimed that VTB was seeking to sell the bank since November 2018. Unconfirmed reports also claimed that Gazprombank could have been involved in a corruption scandal in PDVSA, in relation to the US Department of Justice investigation of Abraham Ortega, a former PDVSA finance executive. Reportedly, Ortega received over $5mn bribes from an unnamed French company and a Russian bank, with Gazprombank and French Perenco possibly involved. Gazprombank argued in response that in 2013 the bank was in charge of financing the capital spending of joint venture Petrosamor "on market conditions and without any preferential
67 RUSSIA Country Report April 2019 www.intellinews.com