Page 101 - RusRPTOct20

Capital position is solid enough for dividend payments. Sberbank's N1.1 dropped 32bp m/m and N1.0 declined 22bp m/m to 13.1% and 15.3%, respectively, amid RWA growth, negative securities revaluations and CBR requirements. Yet, we do not see any threat for 2019 dividend payments (to be approved by AGM on 25 September).
Russia's largest bank state-controlled ​Sberbank​ sees record loans in August. ​The bank reported RUB76.6bn ($1.01bn) net income under Russian Accounting Standards (RAS) in August 2020, showing 4% year on year and 17% month on month growth, and making a return on equity (ROE) of 15%. As reported by ​bne IntelliNews,​ the bank previously showed ​stable recovery under​ RAS, together with the other largest banks supported by the state-discounted mortgage issuance. While an ​upbeat outlook on 2020​ was maintained, Sberbank admitted it was likely to miss its ​ambitious profit targets this year​. Notably, loan growth remained strong in August, despite summer and seasonally lower activity, with RUB1.6 trillion record total issuance and historical record for retail loans of RUB441bn, BCS Global Markets commented on September 7. Total loan portfolio expanded by 2.9% m/m, partially affected by foreign currency rates on corporate segment, which showed 2.5% m/m growth. Overall in August, a low interest rate environment, costs savings and stable asset quality support the results, BCS GM wrote, seeing the results as positive and supportive for 2Q20 IFRS numbers, and maintaining a Buy recommendation for Sberbank's shares. Sberbank's capital levels remained stable with 13.1% first-tier capital ratio, despite risk weighted assets' growth of 2.8% m/m, mostly on the back of loan portfolio expansion.
8.1.8 ​Bank news
The net profit of Russia’s second biggest lender​ ​VTB​ Bank fell 58.3% on the year to RUB52.097bn in January–August​, as calculated under Russian Accounting Standards (RAS), as seen by PRIME on Thursday in materials of the central bank. In 2019, VTB Bank’s net profit fell 18.8% to RUB208.296bn.
VTB released 7M20 results. ​Earnings for 7m20 came in at R43.0bn, with 4.3% ROE, while July saw earnings of R1.1bn and 0.8% ROE. The bottom line in July was negatively affected by an increase in provisions, as the cost of risk spiked to 4.9% in July versus 1.7% for 1H20. This was somewhat offset by a R14.4bn gain on the "other income" line, which is likely partly due to a positive revaluation of perpetual debt due to the ruble depreciation in July.
Earnings​. Net income for 7m20 of R43.0bn was down 56% y/y, with 4.3% ROE. Earnings for July were R1.1bn, down 95% y/y, with 0.8% ROE.
Revenues​. NII was up 18% y/y in 7m20 and up 19% y/y in July thanks to lower deposit insurance allocations. NIM was 3.8% for 7m20, up 50
101 ​RUSSIA Country Report​ October 2020 ​ ​www.intellinews.com