Sberbank reveals financial targets for its new 2029 strategy, presents outlook for 2027

MOSCOW. Nov 12 (Interfax) - Sberbank has revealed forecasts for key financial indicators in the 2027-2029 period in a presentation of its new strategy.

Sberbank CFO Taras Skvortsov said in the presentation that the bank's return on equity (ROE) is expected to exceed 21% in 2027 and throughout the period covered by the strategic forecast, while the N20.0 capital adequacy ratio is expected to be at least 13.3%.

For 2027, Sberbank forecasts cost of risk at approximately 1.4%, the ratio of operating costs to income in the 30%-33% range and zero growth in net commission income.

The net interest margin for 2027 is expected to be at around 6%.

Sberbank predicts that corporate lending across the sector will grow 10%-12% in 2027 and retail lending 7%-9%, the bank itself planning to grow in line with the sector. Growth in corporate deposits is expected to reach 5%-7% across the sector, with Sberbank forecasting its own growth on the same level, while growth in retail deposits is forecast at 11%-13%, which the bank plans to exceed.

Sberbank CEO Herman Gref has said that the strategy for 2027-2029 targets ROE at at least 21% per year, compared with the target of over 22% in the current strategy. The bank will retain the key principles of its dividend policy and plans to distribute up to 50% of its net profit to International Financial Reporting Standards (IFRS) as dividends, providing its N20.0 capital adequacy ratio remains at 13.3% or above.

The new strategy predicts that corporate lending will grow by an average of 10%-11% across the sector, with retail lending growing 9%-12%, Skvortsov said. "The regulator's cautious approach to easing monetary policy combined with fairy strict prudential regulations for the banking sector is limiting the acceleration of lending. We are expecting to see stable trends in the corporate lending segment, with growth in the range of 10%-11%, and a modest recovery in the rate of retail lending to 9%-12% over the next three years," Skvortsov said. He also said that growth would primarily be driven by secured lending, mortgages and vehicle loans.

"Regarding funds raised from private clients, we forecast sector-wide annual growth of 11%-13% amid a gradual decline in interest rates. Growth in corporate deposits in 2027 will significantly lag behind retail growth, but is expected to recover to 9%-11% over the two years thereafter as business activity goes back to normal," Skvortsov said.

He said that Sberbank's net interest margin would gradually decreased throughout the period covered by the new strategy, though it is expected to stay above 5.5% by the end of 2029. The growth rate of net commission income in 2027-2029 will not exceed the rate of inflation, with 2027 likely to be the most challenging year, Skvortsov said.

"Regarding the cost of credit risk, we expect it to normalize at around 1% by the end of the forecast period. The corporate segment, however, will face significant pressure, particularly next year. The cost of risk for retail loans is expected to remain stable. There may be some improvement in risk metrics as the portfolio breakdown shifts toward secured lending," he said.

Sberbank expects that financial results from other forms of activity, including its non-financial business, will move into the positive zone and begin making a substantial positive contribution to the group's overall results over the three-year period.