Page 68 - RUSRptSept18

point in foreign currency reserve requirements will raise costs for banks, it is not so severe to completely alter their funding strategy. Economists are confident that Russians will continue to make deposits in dollars. What’s more, they warn that if the CBR continues to vigorously pursue de-dollarization, the banking system is less likely to experience a transition to rubles, but rather an outflow of foreign currency abroad.
Experts reported an increase in the size of a mortgage loan in Russia for the year. The average mortgage in Russia in the second quarter for the year increased by 7% by RUB142,800 to RUB2.16mn, according to the website of the National Bureau of Credit Histories (NBKI). At the same time, among the top 40 regions in terms of mortgage lending in the country, the largest amount of mortgages grew in Tatarstan (+ 15.4%), Volgograd (+ 14.4%) and Saratov (+ 13.4%), and in Bashkiria (+ 13%) and the Kirov region (+ 11.4%). In Moscow and St. Petersburg, the indicator grew by 4.5% and 2.5%, respectively. At the same time, in a number of regions the average size of the mortgage loan has declined. This is the Yamalo-Nenets Autonomous District (-2.9%), the Voronezh Region (-1.7%), the Khabarovsk Territory (-1.4%), the Irkutsk Region (-1%) and the Tyumen Region (without KhMAO and Yamal 0.7%). Most of the money on the purchase of housing from banks was taken by Moscow residents (RUB4.59mn), Moscow Region (RUB 3.36mn), Yamalo-Nenets AO (RUB 2.71mn), St. Petersburg Petersburg (RUB RUB 2.71mn) and the Republic of Sakha (RUB 2.47mn). On the contrary, the lowest mortgage was registered in Chelyabinsk (RUB 1.42mn) and Kemerovo (RUB 1.48mn), the Altai Territory (RUB 1.52mn), the Vologda Region (RUB 1.52mn.) And the Udmurt Republic (RUB 1.58mn).
8.1.8 Bank news
Russia's leading bank Sberbank reported strong second-quarter IFRS results with net income of RUB215bn growing by 16% year-on-year, making a return of equity of 24.4% and beating the consensus expectations by 5.5%. Sberbank expanded both retail and corporate loans by 6.5% and 6.3% quarter-on-quarter, respectively, with unsecured consumer lending up by 12.4% q/q. "In the corporate segment, Sberbank greatly outperformed the rest of the sector, which was down 0.4% q/q in 2Q18," VTB Capital commented on August 23. In a separate announcement Sberbank said its mortgage portfolio reached a record-high RUB3.3 trillion ($48bn) as of August 1 2018. In 2018 the bank issued about 0.45mn mortgages for a total RUB828bn, soaring by 74% y/y. Sberbank's secured solid market leading position in t he mortgage segment ahead of possible slowdown , as some of the banks start to raise mortgage interest rates, Vedomosti d aily said on August 22 citing marketing agency Marcs. "Despite the good numbers, investors are paying no attention to Sberbank’s positives at this stage, with sanction risks prevailing, and the ruble’s significant weakness weighing heavily on all banking stocks," Renaissance Capital commented on August 23, while warning that "Sberbank will remain volatile until there is clarity regarding the new sanctions". While Sberbank "remains hostage to sanction fears and a weaker rouble" VTB Capital believes such risks are priced in already. The bank maintained a Buy recommendation on Sberbank's shares with 12-month target price of RUB 360, implying a 102% estimated total return. "The next bottom-up catalysts will be the closing of the [Turkish] Deniz Bank sale and a potential dividend payout increase," VTB argues.
Alfa Bank reports strong the first half of 2018 IFRS results. ABH Financial Ltd, the holding company of Alfa Bank, reported its the first half of 2018 IFRS results on August 29. The results were rather strong. The bank earned $0.66bn in net income in the first half of 2018 (up 53% y/y) on the back of a retail lending expansion, still-healthy margins and solid cost control. Its annualized ROAE was 19.8% in the first half of 2018, up from 13.2% for the full year 2017. Pre-provision operating income grew 30.9% y/y to $1.44bn in
68 RUSSIA Country Report September 2018 www.intellinews.com