Bank Saint Petersburg Review

Обзор банка «санкт-петербург»

Bank "Saint-Petersburg" (MOEX: BSPB) Is a large Russian regional bank, which has more than 30 years of development history. The head office is located in St. Petersburg.

Обзор банка «санкт-петербург»

Business structure

The bank's core business is divided into four business segments.

Corporate banking - services of servicing the accounts of organizations in the bank, attracting deposits, providing loans and credit lines.

Retail banking - banking services to individuals, for example opening and maintaining checking accounts, consumer, mortgage and other types of lending, attraction of deposits and much more.

Operations in financial markets - trading operations with financial instruments, providing loans and attracting deposits in the interbank market, transactions with foreign exchange and derivative financial instruments.

Unallocated articles - the result of internal funding, which is formed by the reallocation of resources within the bank in the normal course of business between business segments.

Bank Saint Petersburg income structure, billion rubles

Net operating incomeShare in overall results
Corporate banking9,09247%
Retail banking5,24727%
Operations in financial markets1,1546%
Unallocated articles3,88320%

Bank assets

The main financial asset of the bank is its loan portfolio, which for the last 5 years grew by 43% and as of 30 June 2021 amounted to 507.3 billion rubles.

Обзор банка «санкт-петербург»

Обзор банка «санкт-петербург»

Bank assets

Loans and advances from customers63%
Securities and repo24%
Fixed assets and other assets5%
Money4%
Bank loans4%

63%

The structure of the loan portfolio of Bank Saint Petersburg

Individuals24,6%
Trade14,6%
Leasing and financial services11,6%
The property10,6%
Heavy engineering and shipbuilding7,5%
Oil and gas6,2%
Manufacturing and food industry5,6%
Construction5,4%
State institutions5,1%
Transport4,2%
Sport and health1,5%
Other3,1%

25%

Share capital and profit distribution

The main feature of the company is a low value in relation to its capital, which is largely due to the dividend policy of Bank Saint Petersburg.

The authorized capital of the bank is divided into 475 554 232 ordinary shares, which are traded on the Moscow Exchange under the ticker BSPB, and 20 100 000 preferred shares, which are also traded on the Moscow Exchange under the ticker BSPBP.

Bank Saint Petersburg has one of the lowest IFRS net profit distribution ratios on ordinary shares on the Russian stock market - 20%. For preferred securities, the company pays fixed 0,11 P annually.

The company tries to compensate for the low profit distribution ratio with a buyback. Last buyback announced 6 August 2021, during it, the bank plans to proportionally purchase from shareholders 14 million ordinary shares at a price 75 Р.

Обзор банка «санкт-петербург»

Bank's strategy for 2021-2023 and financial indicators

Bank Saint Petersburg has been demonstrating strong financial results over the past five years, showing double-digit return on equity and growth in net income.

At the end of 2020, the company updated its development plan for the next three years.. In the previous version of the strategy for 2018-2020, the bank expected to reach the following indicators:

  1. To ensure the growth of assets up to 700 billion rubles. Goal accomplished, the result of 2020 - 730 billion rubles.
  2. Achieve sustainable return on equity, exceeding 15%. The goal is not fulfilled, result of 2020 - 12,9%.
  3. Increase the market value of the bank in 3 times - up to 75 billion rubles. The goal is not fulfilled, the result of 2020 - 24.6 billion rubles.

New targets for 2023, billion rubles

Results for 2020Target for 2023
Loan portfolio460600
Legal entity loans350440
Loans to individuals110160
Revenue3750
Net profit1017
CIR36%34%
Index H1.29,9%> 9,5%
Return on equity12,9%15%

Financial performance of the company, billion rubles

Net interest incomeNet profitReturn on equity (ROAE)Return on assets (ROA)
201621,3584,2787,3%0,7%
201719,6587,49111,4%1,3%
201821,8959,04712,3%1,4%
201923,2817,90610,2%1,2%
202025,52310,82712,9%1,5%
1п202113,0967,26916,1%2%

Comparison with competitors

P / EP / BVROE
Bank "Saint-Petersburg"2,450,3816,1%
Sberbank6,741,4525,3%
VTB5,930,6118,5%
TCS Group24,189,1238%

Arguments for

Evaluation. Bank Saint Petersburg's multipliers lagged far behind all competitors.

High profitability. As of 1 half year 2021 the bank's return on equity - 16,1%.

Reduction of the authorized capital. After the buyback, the company redeems the repurchased shares.

Russia's GDP growth. According to analyst consensus, the growth of the Russian economy this year will be 3,9%.

Arguments against

Profit distribution rate. Bank allocates 20% net profit under IFRS on dividends - against 50% in Sberbank and VTB.

Low valuation of shares upon repurchase. The company announced the price of the last buyback - 75 R per ordinary share, this corresponds to the estimate P / BV c 0,38.

What is the bottom line

Bank Saint Petersburg is ideally suited for long-term investments counting on a good dividend yield of 6-8% and a strong underestimation in comparison with competitors. The bank is able to grow several times, if the company's management decides to improve its dividend policy to the rate of distribution of payments of the leaders of the banking sector - 50% net profit.

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