Page 79 - RusRPTNov19

8.1.8 Sberbank news
Sberbank released better than expected 3Q19 IFRS results. The net interest margin (NIM) paused its recovery in 3Q19, sliding by 9bp q/q to 5.08% and missing analyst expectations of 5.15%, as net interest income (NII) came 1% weaker but inline with consensus. Cost of funding pressured NIM in 3Q19, despite the CBR’s combined cut of 50bp to 7%. Fees came 2% above BCSe and consensus and growth improved to 15% y/y (2Q18 base was adjusted for VAT loyalty) and 11% q/q, driven by transactional business and getting closer to Sberbank’s guidance of low to mid-teens in 2019. Full cost of risk (CoR) came higher as expected to 1.06% after very low 0.1% in 2Q19 (driven by recoveries of Agrokor debt). Although provision charge came a bit higher – 7%/23% vs BCSe and consensus. 9M19 CoR increased to 0.7%, running below Sberbank’s guidance of 100-110bp for 2019. Operating expenses of RUB167bn +8% y/y and -1% q/q – mostly inline with BCSe and consensus. Elevated growth of opex was driven by payroll indexation and VAT rate increase.
The client database of Russia's largest bank Sberbank is on sale online , Kommersant d aily reported on October 3 citing the founder of Device Look Ashot Ogantessyan. Reportedly, access to over 60mn credit cards is available. Sberbank is Russia's largest creditor and the front-runner in Russia’s digital innovation, planning to create an ecosystem of digital services under the “Sber” brand. Reportedly the database on sale consists of 11 partitions, matching the number of the bank's regional divisions. Sberbank's representatives denied the bank had been hacked telling Kommersant t hat external breach of the database is impossible. The bank also claimed that the number of active credit cards is way below 200mn.
In September 2019, Sberbank’s RAS earnings were flat y/y at RUB72.1bn , implying 20.9% ROE. The solid net provision release and accelerated growth of net F&C income supported the bottom line, while 3mo rolling NIM was up 8bp m/m. In 3Q19, earnings totalled RUB221bn with ROE of 21.8%. While the acceleration in net fees and commissions (F&C) income growth closer to the FY19 guidance and the positive result on cost of risk (CoR) (supported by RAS
79 RUSSIA Country Report November 2019 www.intellinews.o