Page 99 - RusRPTSept21

•NII was in line with expectations at Rb3.1bn (-23% y/y; -13% q/q) – 0%/1% miss to BCSe/consensus, dampened by lack of realised gains, yet CFO notes higher interest rates started to filter into NII line – with current Rb3-3.3bn quarterly core NII with Rb3.5bn potentially to be achieved by the end of 2021, given current interest rates’ path.
•OpEx came in higher than expected Rb4.9bn (+19% y/y; +9% q/q) – 4%/3% miss to BCSe/consensus, partially attributed to INGURU acquisition with 2.7ppt from this non-organic component. Thus, 2021G OpEX was hiked to 13-20% (from 11-14%) broke down by: 5-6pp core business expenses growth, 6-8pp development projects incl. the Marketplace and 2-6pp Inguru consolidation and marketing support for Marketplace.
•CFO Max Lapin announced him leaving MOEX after 4 years with the company with transition process is in place currently.
Bank St. Petersburg published its 2Q21 IFRS results on August 25. Many major P&L lines came in relatively close to consensus estimates in 2Q21. The exceptions were:
Trading revenue, which came in at RUB 1.5bn in 2Q21 (we and consensus expected RUB 1.1bn).
Net gains from the derecognition of financial instruments at an amortized value of c. 800mn in 2Q21. This likely represents the recovery of problem loans, and we expect management to elaborate on this during today’s earnings call. The share of Stage 3 loans in the loan book dropped to 10.1% in 2Q21 vs. 10.6% in 1Q21, while their coverage with provisions remained at 83%.
Thanks to these gains, BSPB posted a record quarterly net profit and multi-year record ROE of RUB 4.9bn and 21%, respectively.
In the press release, management announced an expected improvement in its strategic outlook “in terms of ROAE target”, which is currently set at 15%. We think this strategic ROE target could be raised to 17%, while the FY21 ROE guidance could be improved to c. 15% from the current estimate of more than 12%. Details on this should be released as part of the presentation during today’s earnings call.
The underlying estimates that will likely improve as part of the FY21
99 RUSSIA Country Report September 2021 www.intellinews.com