sberbank 2017 guidance · sberbank 2017 guidance the most protracted crisis in the recent history...
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14TH DECEMBER 2016
SBERBANK
2017 GUIDANCE
ALTAI MOUNTAINS, RUSSIA
SBERBANK 2017 GUIDANCE
SBERBANK MACRO VIEW 2017
2
SBERBANK 2017 GUIDANCE
THE MOST PROTRACTED CRISIS IN
THE RECENT HISTORY
Accumulated structural disproportions
Slumping oil prices From $100/bbl in 2013 to ~$40+/bbl in 2016
SanctionsCapital, technologies, risks of tougher sanctions
3 квартала 4 квартала 8 кварталов
-6
-4
-2
0
2
4
6
Q1 '1996 Q1 2000 Q1 2004 Q1 2008 Q1 2012 Q1 2016
3 quarters 4 quarters 8 quarters
GDP GROWTH, QOQ, SEASONALLY ADJUSTED
3
SBERBANK 2017 GUIDANCE
CAN ONLY GO UP NOW, BUT HOW FAST?
The economy will grow from now on
HOW FAST?
OIL AND RUBLE ELECTIONSSANCTIONS
Low prices are no longer the main impediment to growth
Prices are unlikely to fall
The economy has adapted
The real exchange rate dropped by 15%
It is not likely that the sanctions against Russia will be expanded
Trump wants to soften the policy
Inside Europe, there is no unity on the issue of sanctions
Presidential elections in Russia inMarch 2018
Pre-election expenses is an additional impetus
However, the resources are limited
GDP growth =1.5% a year GDP growth =3.5% a year
OR
The next time the GDP
will double in 50 yearsThe next time the GDP
will double in 20 years
ONE GENERATIONTWO GENERATIONS
Without structural reforms Reforms + technological breakthrough
4
SBERBANK 2017 GUIDANCE
By 2018, oil prices will grow to USD60-65 per barrel and will remain on that level for a long time
Forecast of Henry Groppe:
Sou
rce:
Gro
pp
e, L
on
g &
Lit
tell
, Min
istr
y o
f E
con
om
ic D
evel
op
men
t, C
BR
, CM
E o
f Sb
erb
ank
Meanwhile, the official scenarios are more pessimistic Sberbank scenario is a compromise
WHAT TO EXPECT FROM OIL PRICES?
80 111 112 109 99
52 40 50 64 59 64 65
84 100 109
138
0
20
40
60
80
100
120
140
2010 2012 2014 2016 2018 2020 2022 2024
99 52 40 50 64 59
40
-
20
40
60
80
100
2014 2015 2016 2017 2018
Генри Гропп МЭР и ЦБHenry Groppe Min of Economy& CBR
99 52 40 50 64 59
4150 55 55
-
20
40
60
80
100
2014 2015 2016 2017 2018 2019
Генри Гропп ЦМИ СбербанкHenry Groppe Sberbank, CMR
5
SBERBANK 2017 GUIDANCE
• Moderate pre-election increase of state spending in 2017
• Sanctions and counter-sanctions will continue
• Gradual but limited oil price recovery
BASELINE SCENARIO: IN 2017-2019, OIL PRICES WILL
BE AT $50-55/BARREL
Economy: Sluggish growth Inflation: Gradual slowdown Rate: We do not expect any shocks
Pre-election spending will support growth in 2017
Inflation is decreasing slowly due to budget deficit and indexation
Moderately hard monetary policy: Key rate ~3.5% in real terms
Sourc
e:
Sta
te S
tatistics S
erv
ice,
CB
R,
Haver,
Centr
e f
or
Macro
econom
ic R
esearc
h o
f S
berb
ank
-3,7
-0,5
1,2 1,0 1,2
-9,6
-3,6
1,3 1,1 1,2
-14
-12
-10
-8
-6
-4
-2
0
2
4
6
2015 2016 2017 2018 2019
GDP growth Consumption growth
12,9
5,85,0 4,5 4,0
11,010,0
8,58,0
7,5
0
2
4
6
8
10
12
14
2015 2016 2017 2018 2019
Inflation (year-end)
Key rate (year-end)
52 4150
55 55
6167 64 62 64
0
10
20
30
40
50
60
70
80
90
2015 2016 2017 2018 2019
Oil price USD rate
6
SBERBANK 2017 GUIDANCE
CONSUMER DEMAND WILL CONTINUE TO REBOUND
Low oil prices are no longer the main impediment to growth
2016 saw prices hover around $40 per barrel
The prices are unlikely to fall further, while any price increase would support GDP growth
The economy has adapted to ruble's free floating exchange rate
Since 2014, ruble's real exchange rate has devalued by 15%
Consumption will return to growth…
... but will stagnate
Real wages are growing due to shrinking labor resources
In 2015, the working-age population decreased by 1.2 mn people
Pre-election indexation of wages
Currently wage growth in the economy is contained by the budget sector
Wages will continue to grow
due to demographic factors and elections
Now the household income is declining despite wage growth
At first, the pensions were indexed at 4%
The second indexation will be replaced by RUB5,000 compensation
Pre-election pension indexation
Compensation — at the start of the year
Indexation in the second half-year
The income will be supported by the indexation of pensions
The propensity to save will continue to decline
1,4
-9,6
-3,6
1,3 1,1 1,2
-12
-10
-8
-6
-4
-2
0
2
4
2014 2015 2016 2017 2018 2019
Real wages Real earnings Consumption
Growth rate for wages, income and consumption, % YoY
-2
8
18
янв.12 янв.14 янв.16
Savings ratio Without seasonal fluctuationJan 2012Jan 2012 Jan 2014 Jan 2016
It has practically returned to normal levels
Sourc
e:
Haver,
Rossta
t, C
entr
e f
or
Macro
econom
ic R
esearc
h o
f S
berb
ank
7
SBERBANK 2017 GUIDANCE
The equipment impedes output growth for only 18% of the enterprises.
91% of companies believe that they have enough capacity for the next 6 months.
Main impediment for companies is weak demand and uncertainty
Survey of company executives, Rosstat
5000
7000
9000
11000
13000
янв.11 июл.12 янв.14 июл.15Jan 11Jan 11 Jul 15
Jul 12Jan 14Jul 12
-12
-7
-2
3
8
янв.12 янв.14 янв.16Jan 12Jan 12 Jan 14 Jan 16
INVESTMENT DEMAND REMAINS LOW
The import of investment goods has started to grow
Construction is recoveringBut there will be no boom: Companies do
not see any point in investments
Imports of machines and
equipment, US$ bn
Growth rate for
construction, % YoY
Investments will return to growth…
... but will stagnate
Sourc
e:
Haver,
Rossta
t, C
entr
e f
or
Macro
econom
ic R
esearc
h o
f S
berb
ank
6,4
12,6
2,84,6
-2,8
-11,3
-4,3
1,1
-15
-10
-5
0
5
10
15
Q1 '2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017
Investment growth rate, % YoY
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SBERBANK 2017 GUIDANCE
Moderately tight: Real rate 3-4%
CBR will decrease the rate: The inflation is slowing down, while the growth remainssluggish
Yet the rate decrease will be smoothUp to ~3.5% in real terms in 2017 and ~2.5% in real terms mid-term
4% by the end of 2017
Inflationary expectationsof the population, business community and authorities
Consumption growth (wage growth, decline of savings rate)
Budget policy(indexation and deficit)
External factors
Recession but no deflation
THE INFLATION WILL SLOW DOWN, BUT
THE POLICY WILL REMAIN TIGHT
Current
situation
Inflationary pressure
Bank of Russia's policy
THE GOAL
is hard to achieve
0
1
2
3
янв.14 янв.15 янв.16
Инфляция %мм без сезонности
Sourc
e:
CB
R, H
aver,
Centr
e f
or
Macro
econom
ic R
esearc
h o
f S
berb
ank
5.8 4
0
5
10
15
20
янв.14 янв.15 янв.16 янв.17
Inflation % MoM, seasonally adjusted
Jan 14 Jan 15 Jan 16
Jan 14 Jan 15 Jan 16 Jan 17
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SBERBANK 2017 GUIDANCE
WHAT CAN HAPPEN DIFFERENTLY?
Bank’s scenario
Positively
Negatively
Sharp fall in oil prices due to hard landing in
China
Accelerated inflation caused by external
factors
Capital outflow from emerging markets
Weakening exchange rate due to further
worsening of relations
Oil price growthQuick slowdown of
inflationQuick decrease of the
key interest rateRouble strengthening caused by geopolitics
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SBERBANK 2017 GUIDANCE
Oil prices: $50-55-55 (‘17-’18-’19)
Pre-election spending growth
Oil prices: $25-25-25 (‘17-’18-’19)
Or a 50% quota on oil exports
Oil prices: $60-60-60 (‘17-’18-’19)
Sectoral sanctions lifted
SBERBANK 3 SCENARIOS
Economic growth Inflation RUB/US$
Basic scenario Pessimistic Optimistic
Sourc
e:
Rossta
t, C
BR
, H
aver,
CM
R S
berb
ank
61 68 64 62 64
85 87 89
5657
58
0
10
20
30
40
50
60
70
80
90
100
2015 2016 2017 2018 2019
Базовый Песимизм Оптимизм
12,9 5,8 5,0 4,5 4,0
7,2
5,5
4,54,94,5
4,0
0
2
4
6
8
10
12
14
2015 2016 2017 2018 2019
Базовый Песимизм ОптимизмBasic Pessimistic Optimistic
-3,7-0,5
1,2 1,0 1,2
-1,5
0,2
0,7
21,5 1,4
-4
-3
-2
-1
0
1
2
3
2015 2016 2017 2018 2019
Базовый Песимизм ОптимизмBasic Pessimistic Optimistic Basic Pessimistic Optimistic
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SBERBANK 2017 GUIDANCE
Area EffectRisk
ChinaFalling market and yuan, hard landing
Commodity prices, trade
EurozoneGreece, banks (DB, Italy), migration
Growth of the global economy
GeopoliticsUkraine and Syria, change in U.S. policy
Sanctions, capital outflow, growth of the global economy
BLACK SWANS
Already happened
Ukraine 2014BrexitTurkeyU.S. elections
Will happen
?
RISK ZONES AND BLACK SWANS
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SBERBANK 2017 GUIDANCE
The only man I know who behaves sensibly is my tailor; he takes my measurements anew each time he sees me.
The rest go on with their old measurements and expect me to fit them.
George Bernard Shaw
SBERBANK 2017 GUIDANCE
ON TRACK FOR 2016
14
SBERBANK 2017 GUIDANCE
ON TRACK FOR 2016
EFFICIENCY
PROFITABILITY
BALANCE SHEET
AND CAPITAL
INITIAL21 Jan 2016
1Q IFRS25 May 2016
2Q IFRS25 Aug 2016
3Q IFRS15 Nov 2016
Efficiency Ratio <43.7% Around 40% - -
NIM (average) >4.4% >5% - -
Fees & Commissions
GrowthHigh teens
Mid-to-high-
teens- Low-to-mid teens
Cost of Risk c.250-300 bps c.200-250 bps Around 200 bps -
ROE Low-to-mid-teensMid-to-high-
teensHigh teens -
Loans
Growth
CorporateIn line with the
sector- - -
RetailBetter than the
sector
In line with the
sector
Slightly better
than the sector-
Deposits
Growth
CorporateIn line with the
sector- - Below the sector
RetailIn line with the
sector-
Slightly better
than
the sector
Better than
the sector
Core Tier 1 CAR under
Basel 1 for the Group>9% Around 10% Over 10.5% >11%
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SBERBANK 2017 GUIDANCE
SBERBANK GUIDANCE 2017
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SBERBANK 2017 GUIDANCE
BALANCE SHEET FORECAST
CORPORATE LOANS RETAIL LOANS CORPORATE DEPOSITS RETAIL DEPOSITS
Nominal growth dynamics
In line with the
sector
SECTOR
SBERBANK Slightly better
than the sector
In line with the
sector
In line with the
sector
5-7% 5-7% 6-8% 7-9%
17
SBERBANK 2017 GUIDANCE
SBERBANK GUIDANCE 2017
EFFICIENCY
PROFITABILITY
CAPITAL
Efficiency Ratio Mid to high 30-s
OPEX Growth Lower than inflation
NIM (average) Stable y-o-y
Fees & Commissions Growth High-teens
Cost of Risk 150-170 bps
ROE High teens
Core Tier 1 CAR under Basel 1 for the Group Around 12%
Core Tier 1 CAR under Basel 2 for the Group Over 10%
GUIDANCE
2017
18
SBERBANK 2017 GUIDANCE
Q & A
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