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bne Invest
March 8, 2019 www.intellinews.com I Page 11
Russia’s banking sector trebles profits in January y/y to $4bn
Ben Aris in Berlin
Russia’s banking sector is back in profit and earned RUB264bn ($4bn) in January, according to Central Bank of Russia (CBR) data released on February 28.
Earnings for the first month of the year came in at RUB264bn versus RUB71bn in January a year earlier and RUB114bn in the same month in 2017, which marked the start of the recovery from the crisis years of 2015-2016.
The January result is also well over double the profits earned in all the months of last year and four times more than the RUB65bn that banks earned in December of last year.
However, some of this impressive performance was due to currency effects: the ruble lost 20% against the dollar in 2018, depressing bank results,
but it gained around 5% in January pushing up the results. “In addition, several changes in accounting methodologies came into force that have impacted the sector's financials,” bank analyst Andrew Keeley of Sberbank CIB said in a note.
The number of banks has also continued to fall. The CBR is in the midst of a banking sector clean up that is coming into its end game as the num- ber of banks in Russia fell below 500 in November. This year Russia has started with only 479 banks left as the CBR continues to close smaller banks at the very steady rate of about three a week.
The total loan book was flat m/m in January in nominal terms (+13% y/y), while in FX-adjusted terms loan growth was 1.0% m/m (+10.3% y/y and +10.9% y/y excluding banks whose licenses have been revoked).
Profits at Russia's national carrier Aeroflot profit plunge by 75% in 2018
IntelliNews Pro
Russian national air carrier Aeroflot saw net profit drop by 75% to RUB5.7bn ($87mn) in 2018 according to its IFRS accounts, the company said on March 4.
Revenues of Aeroflot grew by 15% to RUB612bn, but Ebitda was down by 40% to RUB33.6bn and Ebitda margin declined by 5pp to 5.5%.
The company attributed the decline in earnings to the 48% jump in jet fuel spending to RUB128bn,
which was due to oil price dynamics and higher traffic and flight time. Net debt of Aeroflot in- creased from RUB50bn to RUB67.5bn, with debt to Ebitda leverage up from 0.9x to 2x.
Aeroflot was one of the investors' darlings in 2017, but rising costs of both staff and fuel have hurt its bottom line last year. Previously it was reportedly gearing up for a one-off revenue miss of RUB55bn in 2018 due to high jet fuel costs and the ruble devaluation affects.