Page 105 - RusRPTApr21

non-mandatory insurance premiums and fees in the calculation of the regulated “full cost of credit”. TCS Group's management thinks that the current calculation, in which such premiums and fees are not included, is more appropriate.
Costs
The C/I ratio will likely fluctuate around 40% in the foreseeable future due to TCS Group's continued expansion into new markets and client segments.
As part of this, higher acquisition costs are here to stay, with the 4Q20 level of RUB 9bn no longer seen as an abnormal level of quarterly spending.
Corporate governance
TCS Group plans to expand its BoD by inviting several high-profile independent directors.
In turn, the board should play a more active role in devising TCS Group's strategy and expansion plans.
Capital and dividends
No additional share issue is planned.
The decision to suspend dividends is fully driven by TCS Group’s desire to capture post-COVID-19 growth opportunities.
Bank of St Petersburg earned a record-high net profit of RUB 4.5bn in 4Q20 thanks to the spike in trading revenue, as well as better-than- expected NII and net fees.
Bank St. Petersburg released its 4Q20 IFRS results on March 9. Trading income jumped to a two-year high of RUB 1.5bn in 4Q20, pushing quarterly net profit to a record high of RUB 4.5bn, which is well above the consensus estimate of RUB 3.1bn and our estimate of RUB 4bn.
On top of this, quarterly NII and net fees came in 3.6% and 8% above consensus, respectively. NII was supported by a small QoQ growth in the average asset yield (+13bps, on our estimates) coupled with a c. 40bps drop in the average funding cost, which likely reflected the decrease in market rates over most of 2020. Consequently, NIM added 50bps QoQ, on our calculations.
Net fee income outperformed, as the negative effect of various lockdown measures in St. Petersburg towards YE20 was likely more muted than expected. This was coupled with BSPB's efforts to expand its transactional business. The two factors allowed BSPB to expand its net fee income by 18% YoY in 4Q20.
105 RUSSIA Country Report April 2021 www.intellinews.com