Page 68 - RusRPTNov18

means of surveillance once the rollout is complete and kinks begin to be worked out next year.
● Participating banks were supposed to be ready to collect biometric data in 20% of branches by January 1, 2019.
● However, Rostelekom has yet to specify important requirements for the system, including (for example) whether customers should be able to access data through web browsers.
● Any bank that is even partially government-owned must go through the lengthy tender process, which generally takes 3-6 months.
● The only alternative to this process is to develop software in-house, an option that is not technically feasible for most banks and that would significantly raise the cost.
8.1.6 Sberbank news
Russia's largest bank Sberbank posted a very solid RUB217bn ($3.3bn) of operational earnings in the third quarter of 2018 under IFRS , inching up by 0.4% year-on-year, maintaining a stable rate of return on equity (ROE) of 24.2%, and beating the consensus forecast by 9%. "Given the tough environment, we think the results are decent and imply ~10% upside risk to the 2019 consensus estimates," VTB Capital commented on the results published on November 1. In the reporting quarter the net interest margin (NIM) of Sberbank showed resilience, contracting only by 5bp to 5.75%, while previously under Russian Accounting Standards (RAS) NIM declined by 30bp. Sberbank also maintained loan growth with momentum in unsecured consumer loans picking up to 8.8% quarter-on-quarter and mortgages expanding by 6.2% q/q. Fees and commission income was up by 17.7% y/y, while costs remained under control up by 0.3% y/y with cost income ration (CIR) of 32.8%. Sberbank's "stock, though, remains hostage to sanctions concerns and is trading at 2019 forecasted Price/Book Value of 4.4x," VTB commented. The bank notes that "improved visibility on the sanctions and a mix of 15% 2019F EPS [earnings per share] growth and 10% growth" support the positive outlook for Sberbank for 1H19, with the sale of Turkish DenizBank
68 RUSSIA Country Report November 2018 www.intellinews.com