Page 106 - RusRPTJan23

obligations. Synergy and business optimization. According to Otkritie’s Mikhail Zadornov, the bank’s regulatory capital, was Rb369bn as of 1 July 2022. Moreover, according to 6М22 results, Otkritie was profitable with the result of Rb5.7bn under RAS with assets of Rb3tn, of which Rb2.1tn was the loan portfolio (corporates 67%, retail clients 33%). Meanwhile, in VTB’s last available IFRS 2021 report, the bank’s assets amounted to Rb20.8tn and the capital stood at Rb2.2tn. We expect see synergies after the deal with optimization of business processes and cost savings initiatives. The group said that the deal will have a positive impact on VTB's financial results and capital adequacy ratios, according to the media.
TCS CEO says company successfully navigating 2022, says BCS GM.
BCS GM takeaway from a meeting with TCS’ CEO and CFO is that the company remains on its development and growth path with the current business model proved ability to navigate challenges. It has a 12m BUY rating on TCS.
· Key milestones – growth, quality, profitability reaffirmed o 26.3mn customer base
· Current financial stance looks strong
o Liquidity cushion and strong capital levels
o Returning to loan growth possible, CoR to normalize
· Current and future growth requires OpEx to stay elevated
o Will fund future profits
· Valuation: P/E 23e 11.6x for the best quality fintech player; BUY
Business principles reaffirmed – growth, quality, profitability. CEO outlined the key business principles unchanged – asset quality, targeted IRR per product >30% level as well as customer base growth remains the key priority (26.3mn in 3Q22) with further growth in 2023, as we expect. Quality of customer service is the key for customer base expansion, thus the company’s policy is not to cut costs, but rather attract clients with generous loyalty programs. The management also sees normalized loan dynamics in 2023 with key products such as credit cards, POS, car loans and secured products, while also some marginal growth in SME lending. International expansion remains the next point of development with some test and learn steps in different geographies such as Philippines, Mexico, yet less visibility on the timeline given current environment. Change of domicile is a work in progress with no solution currently, the company accounts for all investors’ and shareholders’ interest.
Current business stance – strong liquidity and in our view ample equity positions, back to credit growth on CoR normalization. As previously reported, TCS’ liquidity cushion is quite strong with solid deposit balances (mostly current accounts, as well as saving accounts less sensitive to interest rates change), which allows to keep below market deposit interest rates. Post a pause in issuances on intensified risks in 1H22, loan portfolio resumed growth
106 RUSSIA Country Report January 2023 www.intellinews.com