Page 140 - RusRPTJun24

+12% q/q), which contributed to maintaining a low ratio of the latter to operating income (27%).
Net profit in 1Q24 reached RUB 13 billion. (return on equity - 29%), decreasing by 11% y/y, but increasing by 13% q/q. Total capital adequacy has increased by 0.7 percentage points since the beginning of the year. up to 21.2%. The bank estimates the impact of dividend payments in May on capital adequacy at 1.2 percentage points. The bank updated its forecast for 2024, which provides for loan portfolio growth of 10% (also due to the corporate segment), an operating expenses to income ratio of 31% and a return on equity above 20%.
Sovcombank published generalized consolidated financial statements under IFRS for 1Q24. The consolidation of HCF Bank ensured an increase in the loan portfolio by 18% since the beginning of the year. The profitable acquisition supported earnings in 1Q24, despite rising operating and provisioning expenses. Taking into account the expected dividends for 2023 (RUB 1.1 per share), the yield over a twelve-month horizon could be about 28%, according to our estimates.
With the West exerting renewed pressure on China small Chinese banks are cutting ties with Russian clients. transactions related to Russia are receiving heightened scrutiny from Chinese banks, and smaller lenders have halted the processing of deals altogether. But even with trade becoming more encumbered, few Chinese exporters with heavy exposure to Moscow are mulling a desertion of the lucrative market. Banks still handling payments from Russia – mostly large institutions like Bank of China – are taking extra time to review each transaction causing delays. Exporters in Zhejiang and Guangdong provinces said payments from Russia can still be received in yuan through BOC, albeit delayed, after they were told to switch to the Chinese currency this year. China’s financial institutions put the kibosh on several deals related to Russia after Moscow’s expulsion from the Society for Worldwide Interbank Financial Telecommunication, a platform which facilitates international payments.
Raiffeisen pledges to leave Russia in 3Q24 as margins still high.
Raiffeisen Bank International (RBI) increased its net profit in Russia by 8.2% y/y to €326mn in 1Q24, with the share of Russian business in the profit of the whole group being as high as 45%, Kommersant daily reports citing the group’s financial statements. RBI’s return on equity (ROE) in Russia in 1Q24 was 29.1%, which is higher than that of Russia’s two largest state-controlled banks Sberbank and VTB (24.2% and 22.1% respectively). The bank’s profit grew despite a 21.9% decline in assets in Russia, to €21.1bn, and a 28.2% decline in the loan portfolio to €5.8bn. RBI is under heavy regulatory pressure to come up with an exit plan from Russia, but the bank would take a massive hit, as Russia made up 38% of its net profits in 2023. RBI has been unable to access the profits it has made there because of Russian central bank restrictions. But most recent reports suggested that in reality RBI is delaying
140 RUSSIA Country Report June 2024 www.intellinews.com