Page 69 - RusRPTMay19

processing capabilities. Tinkoff will use the supercomputer to launch predictive analytics based on data collected on the clients. Russian banking sector is on the forefront of developing systems based on biometric and other data. In the end of 2018 Russia's largest bank Sberbank said it plans to buy the Center of Speech Technologies (CRT) speech recognition developer from Gazprombank-affiliated companies for RUB5bn ($75mn). The speech recognition technology could contribute to its own customers' biometric platform that would compete with the United Biometric System (EBS) launched by the Central Bank of Russia (CBR).
MOEX has published trading volumes data for March 2019. Total trading volumes were down 6.7% y/y, driven by a decline in all major markets. Client balances rebounded 19.4% y/y, supported by higher balances in euros. The share of rubles declined further to 11%, while the proportion of dollars remained flat m/m at 20%. In 1Q19, trading volumes declined 4.2% y/y amid weaker trading volumes in MM, FX and securities. Client balances were up 14.3% y/y, driven by growth in euro-denominated funds, while the share of rubles declined 5pp y/y to 12% and dollars fell 7pp y/y to 22%. We see the 1Q19 numbers as a cross read for MOEX’s 1Q19 IFRS results, due in the second half of May. In our view, a relatively weak beginning of the year signals continuing pressure on operating income, which might be partially balanced by the tariff structure and other financial income. Meanwhile, the potential adoption of the new strategy (likely in mid-2019) would bring more visibility how management is going to address the headwinds. The updated outlook for the company’s development will in our view determine the new dividend policy, which could be adopted together with the new strategy. Our unchanged 12- month Target Price for MOEX of RUB120 implies a 38% ETR; Buy reiterated.
Credit Bank of Moscow signed an up to $500mn syndicated facilities agreement with 12 large lenders from Europe, the USA, Middle East and Asia, the bank said on April 1, 2019. The tranches have one- and two-year maturities. The Bank raises an international syndicated loan for a third year in a row, remaining the leading financial institution of the region in the syndicated lending market. The new syndicated loan became one of the largest among the Bank’s 15 syndicated loan transactions closed successfully during more than 15 years of its presence in that market. The proceeds are intended to finance trade-related operations of the Bank’s customers. «We are particularly pleased with the market interest in the two-year tranche, which implies a high evaluation of the Bank’s credit quality,» commented Vladimir Chubar, Chairman of the Management Board.
Prosecutor General’s Office of Russia have started a RUB14.5-bn embezzlement (nearly $225mn) case in absentia against ex-president of the Bank of Moscow Andrey Borodin, his former first deputy Dmitry Akulinin, vice-president Alexey Sytnikov and their subordinates Dmitry Stroganov and Boris Shemyakin, on April 26 according to a statement. Investigators believe that Borodin along with his accomplices embezzled over RUB14.5bn from the Bank of Moscow between 2008 and 2011 by granting knowingly unrecoverable loans and making loss forex trading transactions through companies controlled by them. Borodin, whose Bank of Moscow functioned as the capital's chief investment vehicle under its then-mayor Yury Luzhkov, fled to the UK in 2011. In November 2011, the Russian Interpol bureau put Borodin and Akulinin on the international wanted list. In March 2013, Borodin was granted political asylum in the UK.
69 RUSSIA Country Report May 2019 www.intellinews.com