Page 79 - RusRPTJul20

development on the back of the CBR’s key rate cuts.
8.1.8 ​Sberbank news
Russia's largest bank, state-controlled ​Sberbank​, will miss its RUB1 trillion ($14.3bn) net profit target for 2020, ​the CEO of the bank, German Gref, told TASS in an interview. Gref noted that transfers to reserves that had to be accelerated 10-fold in 1Q20 due to the coronavirus (COVID-19) crisis will undermine the profit target. The CEO also noted that Sberbank had witnessed two spikes in the withdrawal of retail deposits and high demand for foreign currency, but did not qualify it as full-blown deposit flight. As reported by ​bne IntelliNews,​ Sberbank​reporteda4-foldnetprofitboost​monthonmonthto RUB45bn ($655mn) in May 2020 under Russian Accounting Standards (RAS), making a return on equity of 12%. Still, two months of lockdown caused the bottom line in May to decline by 40% year on year and in 5M20 overall by 25% y/y to RUB275bn with an ROE of 14%. As of the end of May the bank had restructured RUB1.1 trillion worth of loans.
Sberbank 5m20/May RAS showed strong, net profit grew 4x m/m. May came surprisingly strong with net profit up 4x m/m​, yet -40% y/y to RUB45bn 12% ROE and 5m20 net of RUB275bn (-25% y/y) with ROE 14%. May was supported by low tax rate, stronger activity in broker operations, DIA expenses rate reduction (also affect 5m20) and cost savings. Yet, CoR pressure persists with flat m/m CoR of 3.5%. We see results as strong with expectations of some improvement in June on the back of lockdown easing.
News: Sberbank released 5m20/May RAS financial results. May was surprisingly strong, despite 2nd month of lockdown in Russia. Ruble appreciated by 4% for the month, but depreciated by 14% for 5m20, affecting financials.
§ NIM looks strong at 6.2% in May and at 5.9% for 5m20, as DIA expense
79​ RUSSIA Country Report​ July 2020 ​ ​www.intellinews.com