Page 71 - RusRPTDec19
P. 71
Customer deposits declined by 1.8% in October, as partly corporate higher cost funding was reduced and retail deposits slid by 0.6% on the back of rate cuts. Thus, LDR increased to 107% in October.
Fees were mostly flat m/m, but +18% y/y to RUB42.5bn. Still 10M19 dynamics remains weakish with +9% y/y increase, affected by the change of methodology to adjust to IFRS accounting.
Cost of risk (CoR) normalised to 1.3% in October after -2.4% in September, with 10M19 CoR of 0.4% vs 1.5% for 10M18, supporting net result. Total provision charge of RUB65bn for 10M19 (-72% y/y), mostly attributed to releases from Agrokor debt restructuring.
OpEx grew by 9% m/m and 10% y/y, given evenly bonuses accruals. 10M19 OpEx growth of 9% y/y is due to staff reallocation from Sberbank Technologies and also driven by annual wage increase and VAT change. Capital remains unchanged with audited yearly result to be included in March 2020. CAR levels mostly unchanged – N1.1 (CT1R) at 11.17% and N1.0 (total CAR) at 14.81%, comfortably above required levels.
October showed some mixed trends with stable NIM at 5.6%, flat fees m/m and pickup of CoR. Still, monthly net income of RUB74bn (+3% m/m, +2% y/y) stays mostly inline with year-to-date average. 10m19 picture implies 8% y/y growth of net profit to RUB739bn with firm 23% ROE.
Russian Sberbank sold the debts of troubled metals and mining major Mechel for RUB50bn to another large creditor of the company VTB Bank, Kommersant d aily reported on November 7. The debt was sold to VTB with a discount, as the whole debt of Mechel to Sberbank is estimated at $1bn. As reported by bne IntelliNews, Mechel renewed negotiations with its main creditor banks, doubting its ability to service debt in 2020. The company also has to recover the stake in its main mining asset Elga from Gazprombank under the risk of having it sold to third parties. Analysts surveyed by Kommersant r emind that the debt passed on from Sberbank to VTB accounts for about 12% of total debt of Mechel, and do not believe that the deal will fundamentally influence the ongoing debt restructuring. The creditor banks entering the capital of Mechel is still seen as most likely scenario.
Sberbank board member Lev Khasis explained the strategy behind the company’s $1BN worth of tech acquisitions over the past three years. Sberbank’s non-financial tech ecosystem is to grow to equal the value of the bank itself. That is, he expects Sberbank’s capitalization, currently RUB5. 4 trillion rubles ($85bn), to double in the coming years. Sberbank is still working out how to integrate its acquired tech companies into a single, cohesive ecosystem, Khasis explained. But in the meantime, the bank will continue purchasing companies that provide “the most sought-after services that people use every day”—food, taxis, entertainment, etc.—all trillion-ruble markets. Sberbank will not just acquire the leaders in each category. According to company data from this past summer, Sberbank’s non-banking services reach an audience of 67mn people per month. In September, more than 47mn, or one in three Russians, used Sberbank’s mobile app. Remarking on how much Sberbank has spent to make this vision a reality, Khasis noted that at just 3% of net profit over the past three years, it was a drop in the bucket.
71 RUSSIA Country Report December 2019 www.intellinews.com
