Page 54 - RusRPTJune18

and in need of recapitalisation, experts surveyed by Vedomosti remind. Latest takover by Prokhorov is unlikely to seriously influence the IFC, which did not depend extensively on other businesses of Vekselberg.
Moscow Exchange ( Moex ) reported first-quarter IFRS results with fees and commission income down by 5% quarter-on-quarter and up 15% year-on-year to RUB5.5bn, which was in line with the market expectations. Moex Ebitda declined 6% q/q and 8.3% y/y to RUB6.3bn, but the decline was due to one-off RUB856mn provisioning loss, which also led to RUB4.3bn net income declining by 14% y/y and missing the consensus expectations by 12%. "Adjusted for this one-off, MOEX's net income is RUB5.2bn, which is a strong result," Aton Equity commented on May 21. "The results are relatively strong, but the reported one-off provisioning slightly distorts the picture, and we therefore do not expect the market to react," the analysts added. Adjusted for the reported one-off provisioning, Aton forecasts Moscow Exchange's net income at RUB20bn for 2018, flat y/y and implying a 13.3x P/E ratio, which the analysts consider "a fair level".
Russia's President Vladimir Putin appointed Igor Shuvalov the head of the state development bank Vnesheconombank (VEB) , Vedomosti daily said on May 24 citing official Kremlin announcement. Shuvalov is a heavyweight bureaucrat that has been Putin's economic deputy since 2008, and later first deputy Prime Minister. On one hand, his appointment is a vote of non-confidence for current VEB head ex-Sberbank banker Sergei Gorkov. In particular, the VEB could get brought back to participate in large-scale investment and infrastructure projects , in line with the massive spending and modernisation effort announced by Putin as part of his most recent "May Decree" .
"The largest player in the history of Russian insurance segment" will be createdafterstate-controlled VTBBank willsellitsinsuranceassetstoS ogaz , country's largest insurer, the bank announced on May 25. The deal will be closed in the third quarter of 2018 for an undisclosed amount and VTB will get 10% in the merged insurer, according to the head of Russia's second largest bank Andrei Kostin. Current president of Sogaz Anton Ustinov will head the merged company, while most of the team of VTB Insurance will migrate to the new insurer as well. Sogaz underwrote RUB158bn ($2.5bn) of premiums in 2017, making it the country's largest insurance company. VTB Insurance had RUB80bn in premiums in 2017, Russia's fourth largest premium portfolio.
Russia's second-largest bank VTB Bank stopped issuing loans to businesses of sanctioned Russian billionaire Oleg Deripaska , the head of the bank and Kremlin loyalist Andrei Kostin told CNBC. "Of course, we are not lending any new money to him, we are not having any operations with him," Andrei Kostin told CNBC's Geoff Cutmore on May 23. The US Department of Treasury released an update to the sanctions against Russia on April 6, with seven Russian tycoons, 12 major companies and 17 government officials added to the Specially Designated Nationals And Blocked Persons List (SDN List). Deripaska’s companies made up more than half of the companies on the list , with Rusal aluminium major's free-fall sending shockwaves through the global metals supply chains and alarming European industrial lobbyists. "With Rusal and others, we're waiting for the OFAC decisions, but we hope that the issue will be resolved because we are a big creditor to him so we need to return our money," Kostin said, insisting that the bank's business would not be affected. Kostin estimated that companies on the SDN list make up less than
54 RUSSIA Country Report June 2018 www.intellinews.com