Taras Skvortsov presented the financial model of Sberbank in the framework of Strategy 2029

Taras Skvortsov, Deputy Chairman of the Management Board, Financial Director of Sberbank:

Macroeconomic forecast and key rate:

On the horizon of the next three years, we expect a restrained dynamics of economic development with an average annual GDP growth rate of 1.5%. We also expect inflation to slow in 2027, stabilizing near the regulator’s target values in 2028-2029 (~4%). This forecast will allow the Central Bank to reduce the key rate below 10% in 2028.

Lending and funds raised:

The regulator’s cautious approach to easing monetary policy, but rather stringent requirements regarding prudential regulation of the banking sector limit the acceleration of credit activity. We expect stable growth in the corporate lending segment – growth in the range of 10-11% – and a slight recovery in the private lending segment to 9-12% in the next three years. Growth will be observed primarily in secured lending: mortgages and car loans.”.

In terms of private clients’ funds raised, we forecast an annual growth of the banking sector by 11-13% against the background of a gradual reduction in rates. The growth of funds in the accounts of legal entities in 2027 will be significantly inferior to retail, but with a recovery to 9-11% in 2028-2029 as business activity normalizes. In these key markets for us, Sberbank will grow on par with the sector.”.

Interest Margin, Commission and Other Income:

• “External conditions will lead to moderate pressure on business margins. Net interest margins will decline smoothly throughout the strategic period but remain >5.5% by the end of 2029.

“In the commission business, revenue dynamics will reflect our previous decisions, including the rejection of a number of one-time commissions and increased investment in customer loyalty. Therefore, in the next three years, the dynamics of net commission income will not exceed the inflation rate (<4% CAGR). The most difficult year will be 2027.

“Financial results from other activities, including non-financial businesses, will enter the positive zone and, in the aggregate, will make a significant positive contribution to the results of Sber in three years.”.

Cost of credit risk:

In terms of the cost of credit risk, we expect it to normalize to around 1% by the end of 2029. The corporate segment will be under a lot of pressure, especially in 2027.

Generative AI and Operational Efficiency:

“An important part of our strategy is to expand the use of generative artificial intelligence.” Now we are talking not only about cutting costs, but also about creating new sources of income. We see opportunities in two directions: transforming traditional financial products towards greater personalization and creating enterprise solutions for our partners based on generative AI.

• “World experience shows that the development of this technology is impossible without substantial investment. Their scale for us will be determined by the dynamics of equipment prices and the need to maintain a high level of reliability of systems and processes. The accompanying increase in depreciation will put pressure on the ratio of operating expenses to income. At the same time, traditional expenditure items, including labor, due to the increase in efficiency from the use of generative AI, will grow significantly slower than in previous periods. The continued focus on operational efficiency will keep the cost-to-income ratio (CIR) in the ~32-35% range.

Capital, profitability and dividends:

A separate challenge for the entire banking sector will be the Central Bank’s announced tightening of capital adequacy requirements for banks, including the restoration of the conservation buffer, plans to increase the premium for systemic importance and increased capital requirements for investments in a number of assets. We take into account the approved requirements of the Bank of Russia for allowances and the schedule for their introduction. And under these conditions, we do not change the target level of capital adequacy under the H20.0 standard at 13.3%.”.

The combination of external conditions, regulatory challenges and strategic business development goals of the Group requires us to achieve an ambitious goal of return on capital – at least 21% annually on the horizon of Strategy 2029. This will allow us to distribute 50% of our net profit to our shareholders and invest the other half in the long-term sustainability of Sber’s business model.

Saver's forecasts for 2027:

Macroeconomic indicators:

GDP growth in Russia in 2027 in the range of 1.2-1.7%;

• Inflation at 4.5-5.0%.

Corporate segment in 2027, banking sector:

Growth of corporate lending in the banking sector 10-12% (Sber will grow on a par with the sector);

• The growth of deposits of legal entities is 5-7% (Sber will grow on a par with the sector).

Retail segment in 2027, banking sector:

• Growth of lending to individuals 7-9% (Sber will grow on a par with the sector);

• The growth of deposits of individuals is 11-13% (Sber will grow better than the sector).

The main financial guidelines of Sber for 2027:

• Net interest margin (average) ~6%;

• Increase in net commission income ~0%;

Operating expenses to income (CIR) ratio of ~30-33%;

• The cost of credit risk (CoR) is ~1.4%.