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Business / Finance

Bank "Saint-Petersburg" continues to increase its profits

Russian banks in the news of Bank business 29.08.2018 at 09:49

News from banks and banking business, the events of world Bank in Russia

Profit of shareholders of the Bank "Saint-Petersburg" increased by 32% to 4.34 billion rubles mainly due to reducing funding costs, redundancy, and higher commissions. Return on equity (TTM ROE) increased to 12.6%. Net interest income before provisions rose by 85% to 6.64 billion roubles thanks to lower funding costs (interest expenses fell by 22%), and reserves by 30%. The cost of risk in 1H 2018 was 1.86%, compared with 2,96% in the previous year. Commission rose by 12%. Key balance sheet indicators have improved. Gross loan portfolio showed an increase in Q2 by 2.7% compared to 1st quarter with the improvement in corporate lending (+1.9%) and retail (+5,5%). The volume of write-offs in 1H 2018 amounted to 1.8 billion rubles, or 0.5% of average loans for six months. The volume of deposits increased by 2.4%. Operating expenses showed growth in the 1st half-year of 11.5% yoy (+10% on wages in particular), but overall the results are quite positive. According to forecasts, the Bank will be record earnings this year, and we maintain interest in the shares of "Bank Saint Petersburg". At the moment stocks are estimated at 2.7 x and 2.5 x annual net profit in 2018 and 2019, respectively, and in the context of risk/return BSPB is a pretty interesting idea in the banking industry.