Page 61 - RusRPTJuly18

RUB 67bn implied 22% ROE and were supported but flat m/m NIM and a reduction of CoR to 138bp after the hike to 354 in April amid a weaker ruble. Loan growth continued in both the corporate and retail segments. We view results as positive given further loan growth and the NIM performance. VTB has set the 12 month Target Price of RUB 360 for ords and RUB 320 for prefs implies ETRs of 71% and 72% and reiterated a Buy for both classes of share. The bank’s loan portfolio growth continued in both the corporate (15.5% y/y) and retail (22.0% y/y) segments. Retail deposits declined 0.7% m/m but were up 7.4% y/y. Corporate customer accounts grew 0.9% m/m and 15.4% y/y. Asset quality was stable, with the share of overdue amounts being flat m/m at 2.4% and down 30bp y/y. CoR declined to 138bp in May, after the spike in Aril, and we expect it to be closer to the normal level in the rest of the year. NIM is flat m/m as funding costs declined, and due to the outpacing growth of consumer lending on the back of a significant reduction in interest rates, while mortgage lending growth also remained high. For 5mo18, F&C income growth accelerated to 23.8% y/y from 23.2% posted for 4mo18. YTD earnings totalled RUB 329bn, which implied 22.6% ROE. N1.1 was at 12.2% that is a comfortable level for increased dividend payments.
The Minsk-headquartered small bank Paritetbank which was controlled by Belarusian President Alexander Lukashenko’s administrative affairs department, is trying to buy the Ukrainian operations of Russia's Sberbank for a second time , after a recent rejection by the National Bank of Ukraine (NBU) on its first bid. In March, the NBU attributed its rejection of the first bid by Paritetbank to "the incompatibility of the applicant with the requirements of the legislation of Ukraine," the NBU said in a statement on March 27, without elaborating. In late 2017, Paritetbank said that it is "highly assesses the potential of [Ukraine's] Sberbank in the context of the goals and tasks facing the management for the development of the banking business". However, some Minsk-based market experts attribute the controversial move to the possibility that Lukashenko is acting in the interests of German Gref, Russia's Sberbank head. Russian billionaire Mikhail Gutseriev, the authoritarian president's confidant and one of the richest businessmen in Russia, could be a mediator in the deal, they say.
Russia's largest bank Sberbank will provide a temporary discount on consumer loans registered by its clients online, the state-controlled bank said on June 14. The discount will about to 50bp and will be valid until July 31 and will nudge the minimum consumer loans rate at Sberbank down from 11.9% to 11.4% annually. The initiative is in line with Sberbank's digitally-driven strategy adopted in 2017 and recently reiterated at the general shareholder meeting along with an increased dividend payment . The bank is steadily rolling out digital and online services and innovations . Last time Sberbank revised the conditions of consumer loans was at the beginning of May, cutting the rates and tying the interest in reverse proportion to the amount of the loan demanded (the bigger the loan, the smaller the rate). Sberbank also stopped issuing loans secured only by private individuals.
Russia's leading bank state-controlled Sberbank confirmed a generous dividend payout of RUB271bn ($4.3bn) or 36% of IFRS net profit payout was approved and suggested it should be privatised at the bank’s annual shareholder meeting on June 8. The dividend payout is more than the 25% of profits the bank paid last year, but less than the 50% the Ministry of Finance has been pushing state-owned enterprises (SOE) to pay.
RUSSIA Country Report July 2018 www.intellinews.com