Page 92 - bne IntelliNews Russia OUTLOOK 2025

as the high rates and other non-monetary policy measures kick in to cool growth and ease inflationary pressures. Nabiullina said that she hopes to be able to start cutting interest rates again in 2025.
The Moscow Exchange (MOEX) has reported record-breaking financial results for Q3 2024, with net profit soaring to RUB 23bn, representing a return on equity (RoE) of 40%. This milestone was achieved amid a doubling of net interest income and a slowdown in the growth of operating expenses, as detailed in the exchange's IFRS financial report for the first nine months of the year. Analysts maintain a "BUY" rating on MOEX shares with a 12-month target price of RUB270 per share and project a 2024 dividend payout of RUB24.4 per share, yielding 13% at the current price.
Interest income fuels performance
While overall trading volumes grew 2% quarter on quarter in Q3 2024, the shift from higher-margin to lower-margin segments – such as a decline in FX trading offset by growth in the money market – limited the potential for fee income expansion. Fee income increased 3% y/y but fell 4% q/q.
Net interest income, however, surged by approximately 100% y/y, both for Q3 and the nine-month period, driven by rising interest rates. This contributed significantly to operating income, accounting for 56% in Q3 and 59% for the year to date. Additionally, net income from foreign currency and precious metals operations provided a positive contribution in Q3, contrasting with earlier quarters.
Slower growth in operating expenses
Operating expenses increased 54% y/y in Q3 but declined 8% compared to the previous quarter. MOEX's restrained share price performance during the quarter – a 5% drop q/q – meant the long-term incentive programme (LTIP) did not contribute to expense growth. Personnel costs had previously surged in the first half due to LTIP-related provisions.
Capital expenditures climbed sharply, rising 175% y/y in Q3 and 130% y/y for the nine months, prompting the exchange to revise its 2024 capex forecast to RUB9-12bn from the earlier RUB8-11bn. This significant increase in capex, expected to spike further in Q4, could potentially limit MOEX’s dividend payout ratio for the year. Analysts project a dividend payout ratio of 65-70% of net profit.
For the first nine months of 2024, MOEX’s net profit reached RUB61.9bn, up 52% y/y, with a RoE of 35%.
92 Russia OUTLOOK 2025 www.intellinews.com