Page 82 - RusRPTNov19

recapitalization, Kostin noted that the bank does not have “a large reserve of capital”. Another topic raised was 2019 net profit guidance of RUB200bn – Kostin sees both positive (the potential sale of Tele2) and negative (military loans write-offs) factors. As there is no final decision in regards to military loans, 2019 net profit guidance was reiterated. As of 1 July, VTB’s local capital ratios look thin vs min levels. The ratios are N20.1 8.39% (8.0% min), N20.2 9.23% (9.5%) and N20.0 11.24% (11.5%) – effective 1 January 2020. That said, we have yet to account for 2H19 earnings. Still, bankers see little risk to the 50% payout of net income for 2019, given the management’s and CEO’s firm comments.
Tinkoff bank has released 8m19 RAS highlights . These monthly numbers are quite important at the moment given the sharp slowdown in loan growth we saw in July. August saw a bit of a pickup, from 2.1% to 3.2% m/m gross loan growth, with y/y growth at 73%. Net loans rose 3.1% m/m, and y/y growth rose to 81%, as August 2018 saw low growth. RAS net income was RUB19.3bn in 8m19, up 74% y/y.
Retail deposits rose 3.9% m/m and were up 52% y/y in August, which is very strong. The N1.1 ratio was 8.6% at the start of September but still did not include the recent SPO proceeds.
Sberbank currently models 82% y/y net loan growth for the year, which may look too high given the slowdown we are now seeing.
Fitch Ratings has upgraded Tinkoff Bank's (Tinkoff) long-term Issuer-Default Ratings (IDRs) to 'BB' from 'BB-', with a Stable outlook, the agency said on October 11. Tinkoff Bank is Russia’s only pure online bank operated by leading consumer lender TCS Group Fitch attributed the upgrade of Tinkoff's ratings to the bank's extended record of exceptionally strong performance, supported by the ongoing diversification of the bank's business model and growing franchise. The rating also reflects improved capitalisation after the recent secondary public offering (SPO), which "together with strong pre-impairment profitability results in a greater ability to absorb losses in case of stress relative to its peers."
Russia's St Petersburg Bank reported net income growth of 14.4% year-on-year to RUB3.6bn in 9M19 under Russian Accounting Standards (RAS). The bank recovered from the one-off trading loss seen in 1Q19. In 9M19 net fees and commission income grew 24% y/y to RUB4.9bn and net interest income rose 2.8% y/y to RUB16.3bn. Notably, since implementing its digital strategy in February 2018, the bank increased online sales from 36% to 53%. BCS Global Markets on October 25 welcomes the strategy bearing fruit, seeing the results as positive and a good proxy for the upcoming IFRS report. "An effect in digitalization... points to a positive vector of developments," the analysts believe. Bank Saint Petersburg previously sold shares in 2007, 2013, and 2017. In July 2017 the bank help an SPO a 13.6% stake on MOEX at RUB53 per share.
8.2 Central Bank policy rate
The board of the Central Bank of Russia (CBR) decided to cut the key interest rate by whopping 50bp (basis points) to 6.5% at its regular monetary policy meeting on October 25, the biggest cut of the year and marking the start of a bolder than expecting easing policy.
82 RUSSIA Country Report November 2019 www.intellinews.o