Page 107 - RusRPTApr21

TSR. These new targets might be challenging for the bank, given the tight competition from large banks, even if BSPB accomplishes its plans in regional expansion, we think.
CoR might be one of the key drivers for profitability. Management has said that in 2013-20, CoR was at 80-110bp, excluding the vintage loans issued before 2013 (currently the exposure is at RUB 34bn), as stricter risk management came into effect. However, for 2021 management targets a conservative 200bp CoR, given the macroeconomic risks. We see downside risks for management’s target for the current year and forecast a further decline in CoR in the medium term, Bottom line. The further digital development of BSPB’s operations targets growth in those niches where the bank already has expertise, with the emphasis on the transactional and lending business. Partnerships are also going to be a good addition. However, the macroeconomic headwinds and the competition for clients who could be looking for more non-banking services might present a challenge for the bank. We think that BSPB might return to its practice of buying back shares as well as paying dividends, which would support our upbeat view on the stock.
107 RUSSIA Country Report April 2021 www.intellinews.com