Russia's Sberbank, which already dominates Russian corporate broking and has recently acquired Troika Dialog, has taken the lions share of fourth quarter lending in 2011, according to data released by Russian Central Bank Deputy Chairman Alexei Simanovsky:
Total lending expanded 28% in 2011, with corporate loans up 26% and retail rising almost 36%
Lending data for 4Q11 suggest that Sberbank provided almost 70% of loan growth, highlighting its competitive advantage in a generally tight liquidity environment.
Troika Dialog has released a note to highlight this, but the numbers speak for themselves:
> A telling final quarter. Sberbank's 2011 RAS numbers, out yesterday, caught our eye with over 6% loan growth in December, following almost 5% in November. This is really placed in context by the sector data, which show that Sberbank accounted for pretty much all of the loan growth in December, with the rest of the sector actually seeing a small contraction.
> Capitalizing on liquidity. The Russian economy continues to perform well and credit demand is being further enhanced by the lack of other funding opportunities for companies. Liquidity is key here, and Sberbank is clearly best placed to capitalize on this. What is also important is that yesterday's numbers showed Sberbank's margins are stable or even increasing - reflecting higher loan rates and an improving mix. Deposit rate hikes will take a few quarters to feed into Sberbank's P&L, so its margins should hold pretty flat this year.
> Read-through elsewhere. We think other banks under coverage will have delivered minimal loan growth in 4Q11. This is not necessarily a concern after a generally robust first three quarters. VTB guides a drop in risk-weighted asset growth in 4Q11 after delivering decent growth previously in the year, but capital and funding constraints help explain why it is more cautious on its 2012 loan growth outlook than Sberbank (about 14% versus 24%, respectively). For the less-liquid names, getting funding at an acceptable price to support loan growth will be a key challenge in 2012. A look at loan/deposit ratios shows Vozrozhdenie Bank at 90%, Bank of St Petersburg at 97% and NOMOS Bank at 131%. Shorter maturity profiles also mean greater margin risks than those for Sberbank. VTB will also face near-term margin pressures as it has taken expensive short-term Finance Ministry funding to meet credit demand, and this will be reflected in higher funding costs in 4Q11.
For Euromoney's latest coverage on Sberbank, check out the following:
Stars of the future: David Walker, Sberbank
Sberbank throws its weight into investment banking
The investment banks of the future
Russia confronts new liquidity crunch
- Euromoney Skew Blog