Page 63 - RusRPTFeb20

8.1.8 ​Sberbank news
Russia's largest bank, Sberbank, reported RUB870bn ($14bn) in net profit under Russian Accounting Standards (RAS) for 2019, up by 11% year on year ​and making a return on equity of 21%. The state-controlled Sberbank is the economy's largest creditor and deposit holder, while also being at the forefront of digitial innovation and aiming to provide a wide range of digital services under the Sber ecosystem. Sberbank has become a so-called “tourist stock”​ – if an investor has an appetite for Russian risk then the first stock they buy is Sberbank. The name remains one of the top picks for ​investors overweight on Russian equities​. In December the bank showed another record loan issuance, which seems to be supported by decreasing interest rates, BCS Global Markets commented on January 15, while affirming the Buy rating on Sbebrank with a target price of RUB310 per share. Loan issuance in December stood at RUB2.2tn corporate (RUB13tn for 2019) and RUB340bn retail (RUB3.4tn for 2019), supported by the declining interest rate environment. Overall, its total loan portfolio grew by 4% in 2019 and by 6.8% FX-adjusted. Sberbank's net interest margin (NIM) showed improvement with 7bp month-on-month expansion to 5.9% with 2019 overall NIM of 5.8%. While in 2019 overall the NIM went down by 50bp y/y, Sbebrank managed to contain the 100bp contraction seen in the beginning of that year.
8.1.8 ​Bank news
Russia's second-largest bank state-controlled ​VTB​ plans to launch an open IT platform to unite financial and consumer services in 3Q20, planning to invest RUB2.5bn ($40mn), RBC business portal reported on December10.Asreportedby​bneIntelliNews,​ mostrecently​VTBsaiditaims to bridge the digital development gap​ with Sberbank, Russia's largest bank and tech giant wannabe aiming to unite all services under Sber branded ecosystem. Reportedly, VTB's "super-app", analogous to Chinese WeChat, will be open to third party providers such as retailers, food and restaurants, transportation, lifestyle services, digital services and others.
Investment bank earnings from fees doubled in 2019​. Investment banks earned $347.7mn in commissions with Russian companies (including those with Russian roots), analysts at Refinitiv calculated. This is almost twice as much as a year earlier $192.7mn. Most of all they were brought by the equity market: remuneration there jumped more than nine times to $103.4mn. The amount of transactions amounted to $2.9bn ($484mn a year earlier), mainly - re-placement of shares (SPO). For the year, bankers organized only one IPO: HeadHunter raised $253mn on NASDAQ. According to Refinitiv, the largest deals on the stock market last year were SPO Norilsk Nickel ($552.8mn), NLMK ($400mn) and Polyus ($389.5mn).
The Central Bank of Russia (CBR) plans to sell the ​Financial Corporation Otkritie​ (FC Otkritie) in 2021 ​to either an anchor private investor or at an initial public offering (IPO). Under Governor Elvira Nabiullina the CBR waged a banking sector clean-up, culminating in 2017 with $40bn worth of bailouts of some of Russia's largest private banks such as FC Otkritie, Promsvyazbank
63​ RUSSIA Country Report​ February 2020 ​ ​www.intellinews.com