Russia's Sberbank on track for higher 2013 profits
MOSCOW, April 4
MOSCOW, April 4 (Reuters) - Sberbank, Russia's largest bank, is sticking to its forecast for a rise in net profit of at least 6 percent this year, driven by robust retail lending growth, analysts who attended the bank's investor day said on Thursday.
The state-controlled bank, which accounts for a third of overall lending in Russia, sees net income of between 370 billion and 390 billion roubles ($11.7-$12.4 billion) in 2013, and loan growth of 15-17 percent, VTB analysts said.
Sberbank posted record net profit of 347.9 billion roubles in 2012.
"Reassuringly, CFO Alexander Morozov reiterated the main performance targets for 2013. We liked the fact that management acknowledges the importance of cost control, among the main concerns to us," said J.P. Morgan analyst Alex Kantarovich.
Russian banks are switching their focus to retail lending as corporate demand for loans slows amid a weakening economy in both Russia and its key export market, the European Union.
Retail loan growth of over 20 percent looks achievable, VTB said in a note published after Wednesday's investor meeting.
Sberbank saw its Tier 1 capital, a measure of a bank's financial health, at over 8 percent in 2013, VTB added. Last year the ratio fell to 10.4 percent, the lowest since 2006.
Sberbank's programme to transform its internal processes, including improvements to its risk management and IT upgrades, are on track, Barclays said in a note.
"We believe the internal transformation remains core to the investment case of the bank - it is possible to see the strong revenue enhancements that leveraging off the broad customer base may provide," Barclays said.
Sberbank outlined the key targets of its new 2014-18 strategy, according to Barclays.
Due to be released in the fourth quarter of 2013, these included gaining a more active share of the wallets of its 110 million customers and achieving a cost-income ratio (CIR) of 40-45 percent by 2018. The CIR in 2012 was 49 percent.
Sberbank, which is holding investor talks in New York and London over Wednesday and Thursday, could not be reached for comment. The bank has not yet released any details from the talks.
($1 = 31.5402 Russian roubles) (Reporting by Alessandra Prentice; Editing by Mark Potter)