Page 93 - RusRPTSept21

8.1.8 Bank news
VTB’s monthly net profit came in at RUB30.2bn in July (vs. RUB33.2bn in June), as the bank’s core revenue remained strong and cost of risk remained below 1%.
VTB released its July IFRS results on August 30. The bank’s July results were similar to its June results in many respects:
· The bank reported strong y/y growth in monthly NII (+21% y/y) and net fee income (+34% y/y). Management once again highlighted the growth in commissions from the sale of insurance products and commissions from its brokerage business.
· Monthly NIM remained around 3.8% (no change y/y), as floating-rate corporate loans likely helped to offset the effect of higher rates on funding costs.
· Cost of risk remained below 1% at 0.8% in July vs. 0.9% in June, as VTB stressed "positive economic developments and a favorable operating environment" in its press release.
· Monthly opex was up 10% y/y, with VTB continuing to invest in its digital transformation.
· The slight m/m decline in net profit in July was due to the absence of a visible contribution from other lines. Other income was at RUB7bn in June.
Management reiterated its FY21 net profit guidance of RUB295bn.
Consequently, we view the results release as positive for VTB. The bank remains on our list of top picks, as the FactSet consensus estimate for the bank’s FY21 net profit of RUB240bn continues to trail behind management’s guidance of RUB295bn. The bank’s net profit was almost RUB201bn in 7M21.
The price of Global Depository Receipts (GDRs) of Russian banking TCS Group in London topped $100, pushing its capitalisation to over $20bn, RBC business portal wrote on August 17. TCS operates the country's only pure online bank Tinkoff. As followed by bne IntelliNews, despite tripling in value in the last two years, analysts continue to see a "decent upside" in the shares of TCS Group. RBC says that previously the founder of TCS Oleg Tinkov aimed at a $10bn capitalisation by 2022, the goal that had been reached in February 2021 already. Tinkov also previously saw $25bn capitalisation and 20% market share (3% currently) as possible for TCS.
93 RUSSIA Country Report September 2021 www.intellinews.com