Page 97 - RusRPTNov21

8.1.8 Sberbank news
Sberbank released strong September 2021 / 3Q21 / 9M21 RAS results. Ruble appreciated by 1.1% for the month and appreciated by 1.5% ytd, affecting financials.
§ NIM at 5.7% in September ( -9bp y/y; +10bp m/m) and 5.5% for 9m21 ( -34bp y/y) with 5.6% in 3Q21 ( -26bp y/y) – higher interest rate filter into asset yield improving NIM dynamics with record retail loans issuances Rb0.5tn in September supportive (almost equally split between unsecured and mortgage). Thus, NII comprised Rb1,184.2bn for 9m21 ( +12% y/y) and Rb416.8bn for 3Q21 ( +13% y/y)/
§ Fees came at Rb50.9bn in September ( +11% y/y; -2% m/m), bringing 9m21 to Rb423.5bn ( +16% y/y) and Rb152.5bn in 3Q21 ( +11% y/y) on the back of stronger transactional activity, partially affected by one time distribution of state funds to pensioners and servicemen.
§ SeptemberCoRatcameverylow0.1%(0.3%adjforFX)with9m21reading at 0.5% and 0.4% in 3Q21 – runs very strong against 70-90bp 2021G IFRS.
§ OpEx Rb59.8bn in September ( +17% y/y; +7% m/m), Rb485.1bn for 9m21 ( +11% y/y) and Rb171.0bn for 3Q21 ( +14% y/y), impacted by salaries revision July 1 as well as by the calendarization of expenses with 9m21 CIR at 28% level, +1ppt y/y with 2021G IFRS for financial business ‘stable y/y’.
For 3Q21, Sberbank’s attributable earnings grew 7.2% q/q to RUB349bn, which implies 26.3% ROE, including the effect from a RUB65bn gain for the Eurocement share deal.
The bottom line came 4.1% above consensus forecasts amid solid operating performance. Management increased the FY21 ROE guidance to more than 23%. We see this target as applicable for next year, as the positive effect from higher interest rates is to filter through into the FY22 financials, and CoR is likely to remain below the through-the-cycle-average. Together with the bank’s strong capital position, this opens the way for 60% DPR, in our view. Our updated model implies a 12mo TP of RUB490 for ords (up 26%). Buy reiterated (41% ETR, including a 9.9% DY).
Operating performance. The bank posted 24bp q/q NIM expansion and NII 7.5% q/q growth. The net F&C 11.2% y/y increase remained in line with the FY21 guidance. Provisions included the charge on Ukrainian assets and a recovery of mortgage loan provisions. Attributable earnings, which included the RUB65bn gain from the Eurocement shares deal, totaled RUB349bn (up 7.2% q/q) and implied a 26.3% ROE.
Balance sheet and asset quality. The retail portfolio was up 23.2% y/y and corporate 5.6% y/y. The share of NPLs declined 34bp q/q to 3.3%; CoR for loans was at 85bp, including a net provision release in mortgages.
Ecosystem. The payment business PBT grew 6.7% q/q to RUB71.4bn (20.3% of total) and wealth management 39.6% q/q to RUB12.7bn
97 RUSSIA Country Report November 2021 www.intellinews.com