Bank of St Petersburg - CEO Out, SPO Done, Time to Focus on Operating Performance
Bank of St Petersburg has completed its SPO bookbuilding and expects to place all 60 mln new shares at R53 per share, which would raise R3.2 bln in new equity. This caps a turbulent period for the bank and its stock: the placement price is 12% below where the stock traded prior to the SPO launch and to the departure of the CEO and corporate head. While the timing of these departures was odd and unhelpful, on balance we do not think they will have major long-term implications. The operating performance of the bank looks to be improving, with 2Q17 RAS headline numbers appearing broadly supportive. Having incorporated the new equity, we raise our 2017-19 EPS by 4-5% per year, but with 14% share count dilution, we cut our target price by 8% to R73 per share, keeping our BUY recommendation.Bank St. Petersburg OJSC is involved in commercial banking operations within the Russian Federation. Co. is organized into three main segments: Corporate banking, which includes settlement and current accounts, deposits, credit lines and loans; operations on financial markets, which includes financial instruments trading, loans and deposits on the interbank market, dealing in foreign exchange and derivative financial instruments; and retail banking, which provides private customer current accounts, deposits, retail investment products, custody, credit and debit cards, consumer loans, mortgages and other loans to individuals.
Sberbank CIB Investment Research is a research firm offering equity, fixed income, economics, and strategy research. It covers analysis on all aspects of Russia’s capital markets, issues and industries. The firm analyzes trends in Russia and combines local knowledge with a global perspective. It processes macroeconomic data, market and company-specific news, stock quotes and other information for providing research reports. The firm provides details and latest prices on the most traded names and most traded paper on all segments Russian market. In strategy research, it provides thematic research, tips and descriptions of the methodology used to evaluate companies.
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