Page 99 - RusRPTNov21

currently serves about 500,000 people and 3,000 corporate customers, according to its IFRS 2020 financial statements. Mortgages and vehicle loans are not available through the bank.
At the end of 2020, the portfolio of loans to people totaled 45 billion rubles. Credit cards accounted for 19.5 billion rubles after subtracting reserves, whereas cash loans accounted for 25 billion rubles. In contrast, VTB’s retail portfolio, after deducting reserves, surpasses RUB 3.7 trillion, according to the bank’s six-month IFRS reporting.
In 3Q21, Moscow Exchange (MOEX) net profit declined 3.2% QoQ to RUB 6.7bn after a solid provision release in 2Q21.
The adjusted net profit grew 4.7% QoQ. The EBITDA margin edged up 70bp QoQ to 69.8%. Net F&C income was higher 4.9% QoQ and 25.1% YoY. FX losses balanced the NII increase, limiting the influence of the key rate increase. In our view, the results were neutral. Management adjusted its guidance for FY21 opex growth to 18-21%. During the conference call, we intend to look for management’s outlook on the impact of the sharp key rate increase and the securities trading volumes/velocity in 4Q21. Our unchanged 12-month Target Price of RUB 206 implies a 23% ETR: Buy reiterated.
Operating performance remains strong. MOEX F&C income was up 4.9% QoQ and 25.1% YoY. This line came 2% above our and 8% more than consensus expectations. NII grew 5.2% QoQ due to higher interest rates. However, FX losses pushed core NII down 6.2% QoQ and 5% below our and consensus forecasts. Opex YoY growth remained high at 17.3% (flat QoQ) and kept operating jaws positive both on a quarterly and yearly basis. EBITDA was up 3.6% QoQ to RUB 9.3bn (1% below our and consensus forecasts) and implied a 69.8% EBITDA margin. NI declined 3.2% QoQ to RUB 6.7bn, but, adjusted for provisions, it was up 4.7% QoQ to RUB 6.7bn.
Management FY21 outlook. MOEX has narrowed expectations of opex growth to 18-21% from 13-20% before. The capex range was also adjusted to RUB 3.0-3.7bn (from RUB 3.0-4.0bn). Management believes the company has passed the inflection point on NII and expects it to affect operating income growth positively from here.
Performance per segment. Money Market and derivatives were the key performers in F&C income: up 5.2% and 13.4%, respectively. Securities markets F&C income was flat QoQ. High trading volumes kept depository fees at a strong level (up 9.1% QoQ), while the sale of software and technologies and other F&C income (amid Inguru consolidation) ,also supported the bottom line.
Bottom line. MOEX operating performance remains strong. However, with the F&C income becoming the key driving force, the future performance of the exchange will depend on product mix per quarter, as going further we expect volatility to decline. While management sees support from higher interest rates, this tailwind might fade in coming quarters, in our view, while challenges, including competition
99 RUSSIA Country Report November 2021 www.intellinews.com