Page 54 - RusRPTJuly18

8.1.1 Earnings
The sector reported a RUB148bn net profit in March (21% annualised ROAE), but excluding non-recurring profit of RUB67bn in the rescued banks (largely due to a RUB79bn provision recovery at B&N), sector profit was a lower RUB81bn (11% annualised ROAE), of, which the bulk was earned by Sberbank (RUB67bn, 23% annualised ROAE).
Among specialised retail banks, Tinkoff and Rencredit outperformed peers with monthly profit of 3% of equity, Home Credit's was somewhat lower at 2%, while Russian Standard and OTP were about break-even.
The sector average cost of risk in 1Q18 decreased to 1.3% from 3.3% (1.7% excluding banks under CBR rehabilitation) in 2017, reflecting general asset-quality stabilisation. Excluding rescued banks, the sector reported an annualised ROAE of 14% in 1Q18, while net of Sberbank this was a lower 9%.
8.1.2 Loans
Foreign-exchange (FX)-adjusted loan growth was RUB1.1 trillion ( 2.1%, non-annualised) in 1Q18, of, which RUB0.4 trillion (3.1%) was retail and RUB0.7 trillion (1.8%) corporate. At this pace, and with a seasonal 4Q spike, we could see 10% growth for 2018, with corporate at 8% and retail at about 15%. This would exceed 2017 growth of 7%, 5% and 13%, respectively. State banks (excluding those rescued by the CBR) seem to be driving this, accounting for 73%, 68% and 80% of total, corporate and retail growth, respectively.
Sector corporate loans nominally increased by RUB636bn (1.8%) in 3M18 , but grew by a lower RUB355bn (1%) adjusting for 3% ruble depreciation against the dollar in March. The largest FX-adjusted increases were reported by VTB group (RUB162bn, 2.6%), Rusag (RUB42bn, 2.6%), Alfa (RUB89bn, 6.4%) and National Clearing Centre (RUB84bn, 8.4%, all due to reverse repo).
Retail loans net of exchange rate changes grew by RUB212bn (1.7%) in 3M18 . Of the specialised retail banks, Home Credit Bank, Tinkoff and Rencredit grew by 1%-2%, while Russian Standard and OTP deleveraged by 4% and 1%, respectively, probably due to write-offs or bad loans sales, as the decrease was largely in overdue loans.
RUSSIA Country Report July 2018 www.intellinews.com