Page 82 - RusRPTOct21

maintained on a permanent basis. This framework will enable professional market participants to cover potential financial losses at their own expense if credit or market risks materialise.
The ratio is planned toe set in stages. From 1 October 2021, the minimum acceptable value will be 4%, increasing to 6% from 1 April 2022 and thereafter to 8% from 1 October 2022.
Also, market participants will be subject to the banking equivalent of provisioning for credit claims.rokers are currently free of such requirements; yet, similar to banks, they have refund obligations to customers and can use customer funds to issue loans and make repo transactions. Where claims are secured with high-quality assets, it will be allowed to reduce provisions.
“Provisioning is to improve the portfolio of instruments in which brokers will invest, in their own interests, clients’ money,” says Vladimir Chistyukhin, Deputy Governor of the bank of Russia. “It is important that workers are responsible to a client under claims arising from the use of client assets. They should be placed either in steadier companies with the lowest credit risk or in inherently higher-quality instruments.”
8.1.8 Sberbank news
In August 2021, Sberbank RAS earnings grew 38.4% YoY to RUB 106bn
and implied a 26.0% ROE. The bank posted a RUB 32bn provision charge amid intragroup operations (not toe seen in the IFRS results) after a net provision release in July, which resulted in a 16.4% QoQ earnings decline. 8mo21 earnings increased 72.5% YoY to RUB 828bn and implied a 25.4% ROE. We see the bank's solid RAS performance as supportive for its FY21 IFRS targets and see minor upside risks to our FY21F earnings forecasts, as the RAS data suggests FY21 earnings are trending toward some RUB 1.2tn . We keep unchanged our 12-month Target Price of RUB 390 anduy recommendation (26% ETR).
NIM remains flat m/m at 5.6% in August and 5.5% for 8M21 (-38bp y/y) with NII of Rb139.3bn in August (+13% y/y; +1% m/m) – higher interest rates filtering into the figure. Loan issuance was high – Rb1.4trn for corporate and Rb520bn for retail – which drove the further expansion of the loanook (corporate flat m/m; +7% y/y, while retail +2% m/m; +26% y/y).
On the funding side, retail deposits saw some inflows (+10% y/y; +1% m/m) thanks to one-off state social payments. Corporate accounts (+12% y/y; +6% m/m) expanded partially due to inflows to the escrow account from high mortgage issuance.
82 RUSSIA Country Report October 2021 www.intellinews.com