Business diversification and effective integration of acquired assets enabled the Bank to double its net profit compared with the same period of 2020. 

Key results:

• Net profit in 9M 2021 amounted to a record high of RUB 41 billion with a return on equity (ROE) of 32%.
• Net interest income amounted to RUB 83 billion, up 41% year-on-year, while net interest margin reached 7.5%.
• Net fee and commission income grew by 32% to RUB 24 billion.
• Cost of risk declined to 2.8%.
• The Bank’s assets in the first nine months of 2021 grew by 29% to RUB 1.9 trillion (against RUB 1.6 trillion as at 31.12.2020)
• The retail net loan portfolio increased by 56% over 9M 2021 to RUB 464 billion (against RUB 298 billion as at 31.12.2020), driven mainly by growth in the Halva portfolio, mortgage loans and the addition of Vostochny Bank’s retail portfolio.
• The corporate net loan portfolio grew by 72% from the beginning of the year to RUB 596 billion (against RUB 347 billion as at 31.12.2020), mainly due to increased lending to some of the largest corporations.
• The share of Stage 3 loans in the gross loan portfolio stood at 2.1% with non-performing loan coverage of 178%.
• Client current accounts and term deposits increased by 25% from the beginning of the year to RUB 1,249 billion (against RUB 999 billion as at 31.12.2020), which reflects trust in the Bank on the part of large corporate clients and retail customers alike.
• The Bank’s equity capital grew by 19% in 9M 2021 to RUB 224 billion (against RUB 188 billion as at 31.12.2020), while capital adequacy ratios as at 1 October were as follows: N1.1, 9.6%; N1.2, 10.8%; N1.0, 12.7%, exceeding the regulator’s minimal levels for systemically important credit institutions.

Highlights during the reporting period:

• The number of the Bank’s retail clients increased to 12 million (+43% against 8.3 million as at 31.12.2020)
• In April, Sovcombank purchased Vostochny Bank from its key shareholders and completed the consolidation of 100% of its shares by November 2021. As a result, Vostochny Bank’s loan book (RUB 72 billion after provisions as at 30.09.2021) and its 700,000 card clients were transferred to Sovcombank.
• This year Sovcombank inked several other deals to acquire financial assets: the Bank announced the purchase of the National Factoring Company and Vostochny Capital asset management company (renamed Sovcombank Asset Management)
• In April 2021, Sovcombank Group subsidiary RTS-Tender completed the purchase of a 100% stake in JSC Economic Development Centre, the operator of the B2B-Center electronic platform, a commercial e-procurement marketplace.
• The Bank’s credit rating was upgraded by the Expert RA ratings agency to ruAA (February 2021) and by the ACRA ratings agency to AA- (April 2021). The international agency Fitch Ratings confirmed the Bank’s rating at BB+ with a stable outlook (September 2021), while Standard & Poor’s confirmed Sovcombank’s rating at BB with a positive outlook (October 2021).
• In January the Bank placed social Eurobonds worth USD 300 million in line with ICMA principles. This was the first social Eurobond issue by a Russian issuer in the CIS countries.

Retail business. The Bank continues to demonstrate solid growth in assets and profits across all business lines: its retail net loan portfolio reached RUB 464 billion. The Halva instalment card showed the highest growth rate in retail, up by 128% to RUB 124 billion. This was due to a combination of organic growth, the acquisition of Vostochny Bank’s credit card portfolio and the expansion of the mortgage portfolio by 57% to RUB 124 billion in the first nine months of 2021. Retail profit before tax more than doubled (+126%) year-on-year, reaching RUB 27 billion.

Sergey Khotimskiy, Sovcombank’s First Deputy Chairman of the Management Board, said: “This year, we have managed to demonstrate very solid growth in assets and profits in both retail and our corporate business thanks to our teams’ effective efforts and the very wide range of banking products in our portfolio. We’re also very pleased with the results of our acquisition of Vostochny Bank, as over 90% of the bank’s clients have switched to Sovcombank, and they are now enjoying all of the opportunities and bonuses of having a Halva instalment card.”

Corporate business. Corporate lending was one of the main drivers of growth in the Bank’s assets and profits in 2021. Over the first nine months of the year, the corporate net loan portfolio increased by 72% to RUB 596 billion. Profit before tax in the corporate segment grew by 19% to RUB 12 billion. Corporate clients’ current-account and term deposits increased by 28% to RUB 650 billion. The corporate credit portfolio is of high quality: the share of Stage 3 loans in the gross loan portfolio amounted to 1.3% with non-performing loan coverage of 222%.

Over the first 10 months of 2021 Sovcombank’s corporate investment business was the market leader in organizing bond placements for companies in Russia’s real sector. For the second straight year Sovcombank took first place in “The best Russian bank in the CIS syndication market” category at the Loans Cbonds Awards 2021. Sovcombank remains one of the most active players in the syndicated loan market in Russia and the CIS countries. 

Highlights after the reporting period:

• In November 2021, Sovcombank placed an issue of perpetual subordinated Eurobonds in the amount of USD 300 million with a coupon rate of 7.6% per annum.

PJSC Sovcombank is a universal bank and one of the 10 largest banks in the country (with assets of RUB 1.9 trillion according to IFRS). The Bank employs 22,600 people in 2,629 offices located in 1,050 communities in 78 regions of Russia. The Bank serves 12.1 million customers, including 11.3 million borrowers, 600,000 depositors and 200,000 legal entities. Sovcombank has been assigned the following ratings from international agencies: a BB rating with a positive outlook from Standard & Poor’s, a Ba1 rating with a stable outlook from Moody’s and a BB+ rating with a stable outlook from Fitch Ratings. Its credit ratings from Russian agencies include an AA- rating with a stable outlook from ACRA, a ruАА rating with a stable outlook from Expert RA and an AA- rating with a stable outlook from National Credit Ratings agency.