WOOD Flash – Sberbank: 7M18 RAS results - solid, but the bar is already high
Sberbank announced RUB 469bn of 7M18 net income in its RAS results, a 26% yoy increase. July 2018 net income was RUB 71bn, similar to the monthly net income run-rate so far in 2018. NIM is holding up but, as expected, it is not posting a significant rebound from the 1Q18 lows. Fees are going strong, also thanks to the World Cup. Provisions seem to have been affected by increasing risks on some corporate exposures. Opex growth yoy also slowed to 5% in 7M18, from 7% in 6M18. Overall, Sber’s bottom-line performance continues to be solid, but the bar is high. The RAS results are only partly indicative of the IFRS results, but our RUB 817bn end-2018 estimate looks achievable. The RAS figures should be neutral for the stock. We reiterate our HOLD rating on the common shares commons with a RUB 280 PT. The commons are trading at 5.6x PE and 1.2x P/TBV for 2018E.Sberbank Russia is an open joint stock commercial bank. Co.'s principal business activity is corporate and retail banking. This includes, but is not limited to, deposit taking and commercial lending in freely convertible currencies, local currencies of countries where the subsidiary banks operate and in Russian Roubles, support of clients' export/import transactions, foreign exchange, securities trading, and trading in derivative financial instruments. Co.'s operations are conducted in both Russian and international markets. As of Dec 31 2014, Co. had total assets of RUB25.20 trillion.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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