Page 50 - Russia OUTLOOK 2022

On top of that the banking clean up and clearing out of the deadwood or dodgy banks has been completed. The CBR has been closing about three banks a week since 2013 but that has stopped now and Russia has just under 400 banks which was in line with the target level that Putin set at the start of the process to be “on a par with Germany.” Of the remaining banks, 98% were profitable in the first eight months of 2021 with about 85% of the profits were received by the 25 systemically important credit institutions.
Sber (formerly known as Sberbank) is the biggest bank by far and accounts for around half of the sector’s profits by itself.
It is also one of the most popular stocks on the Russian market amongst international investors. It is also a financial powerhouse that is helping to drive economic growth. And finally it is funding Russia’s technological innovation and transformation to a digital economy.
On December 15 it held a Capital Markets Day where it outlined expectations for the full year of 2021 and gave guidance for what is in store in 2022:
FY21 guidance
· ROE is expected to be at or above 23%.
· Net profit is anticipated to be near RUB1.2trillion.
· NIM is expected to lose slightly more than 20bps vs. FY20.
· Cost of risk is seen in the range of 0.7-0.9%.
· Revenue from SBER’s non-financial business is likely to nearly
triple from RUB71.4bn in 2020 to RUB200bn in 2021.
FY22-23 guidance
· ROE is expected to be at or above 20% for 2022-23.
· Opex growth is expected to be 15% for 2022-23, with the C/I ratio
for SBER’s financial business at c. 33%.
· The growth in the corporate loan book is expected to be 7-10% for
2022, which is in line with the sector.
· The growth in the retail loan book is expected to be 10-12% for
2022, slightly outperforming the sector.
· The growth in retail deposits is expected to be 6-8% for 2022,
which is in line with the sector.
· The growth in corporate deposits is expected to be 11-13% for
2022, which is slightly better than the sector.
· NIM forecasts have visibly improved, and NIM is now expected to
moderate just 5bps over 2022 and a further 20bps over 2023. This means that SBER’s FY23 NIM is expected to be 30-50bps above its previous forecast. This is based on the expectation that the CBR key rate should peak at close to 8.5% in late 2021-early 2022 before moderating to 8% by YE22 and dropping to around 5.25% by YE23.
50 RUSSIA Russia OUTLOOK 2022 www.intellinews.com