Russian Banks - CBR Plans Lower Corporate Loan Risk Weights
Last week, the CBR published a press release outlining further proposed changes to risk weights under its new Basel 3 standardized approach to credit risk assessment. In particular, it referenced plans to publish a new draft instruction in 3Q19 that would reduce risk weights for corporate borrowers. We think this should be positive for VTB (HOLD; TP: $1.40), which uses the standardized approach under RAS, albeit at first glance it seems not so materially, potentially providing about 50 bps of capital relief (if the new measures are applied to existing loans). This would at least be supportive as VTB looks to raise the dividend payout next year to 50% of 2019 earnings.
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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