Bank Saint Petersburg Review

Bank Review «St. Petersburg»

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

Bank Review «St. Petersburg»

Business structure

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

Corporate banking — bank account services for organizations, attracting deposits, providing loans and credit lines.

Retail banking - banking services to individuals, e.g. opening and maintaining bank accounts, Consumer, mortgage and other types of lending, attraction of deposits and much more.

Operations in financial markets — trading operations with financial instruments, granting 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 income Share in overall results
Corporate banking 9,092 47%
Retail banking 5,247 27%
Operations in financial markets 1,154 6%
Unallocated articles 3,883 20%

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.

Bank Review «St. Petersburg»

Bank Review «St. Petersburg»

Bank assets

Customer loans and advances 63%
Securities and REPO 24%
Fixed assets and other assets 5%
The money 4%
Bank loans 4%

63%

The structure of the loan portfolio of Bank Saint Petersburg

Individuals 24,6%
Trade 14,6%
Leasing and financial services 11,6%
The property 10,6%
Heavy engineering and shipbuilding 7,5%
Oil & Gas 6,2%
Manufacturing and food industry 5,6%
Construction 5,4%
State institutions 5,1%
Transport 4,2%
sports and health 1,5%
Other 3,1%
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25%

Share capital and distribution of profits

The main feature of the company is a low valuation 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 for 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 R.

Bank Review «St. Petersburg»

Bank strategy for 2021-2023 and financial performance

Bank Saint Petersburg has been demonstrating strong financial results over the past five years, showing a 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. Ensure the growth of assets up to 700 billion rubles. Goal accomplished, result of 2020 — 730 billion rubles.
  2. Achieve sustainable return on equity, Exceeding 15%. Goal not met, result of 2020 — 12,9%.
  3. Increase the market value of the bank in 3 times - up to 75 billion rubles. Goal not met, result of 2020 — 24.6 billion rubles.

New goals for 2023, billion rubles

Results for 2020 Goal for 2023
Loan portfolio 460 600
Legal entity loans 350 440
Loans to individuals 110 160
Revenue 37 50
Net profit 10 17
CIR 36% 34%
Index H1.2 9,9% > 9,5%
Return on equity 12,9% 15%

Financial performance of the company, billion rubles

Net interest income Net profit Return on equity (ROAE) Return on assets (ROA)
2016 21,358 4,278 7,3% 0,7%
2017 19,658 7,491 11,4% 1,3%
2018 21,895 9,047 12,3% 1,4%
2019 23,281 7,906 10,2% 1,2%
2020 25,523 10,827 12,9% 1,5%
1п2021 13,096 7,269 16,1% 2%
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Comparison with competitors

P / E P / BV ROE
Bank "Saint-Petersburg" 2,45 0,38 16,1%
Sberbank 6,74 1,45 25,3%
VTB 5,93 0,61 18,5%
TCS Group 24,18 9,12 38%

Arguments for

Evaluation. Multipliers of the bank "Saint-Petersburg" are 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, 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's the bottom line?

Bank Saint-Petersburg is ideal for long-term investments, counting on a good dividend yield of 6-8% and a strong undervaluation compared to 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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