Sberbank of Russia (OTC:AKSJF) Q2 2023 Earnings Conference Call August 3, 2023 4:00 AM ET
Company Participants
Taras Skvortsov – Vice President, Chief Financial Officer
Conference Call Participants
Eugene Kipnis – Alfa Bank
Svetlana Aslanova – Arowana Capital.
Elena Tsareva – BKS
Olga Naydenova – Sinara
Ilya Marochenkov – PFL Advisors
Olga Sivkova – Journalist, Commerce
Tatiana Tsubasa – Interfax
Yulia Koshkina – RBC
Ilya Ilyin – Promsvyazbank
Operator
Good afternoon, dear investors and shareholders. Thank you for waiting. And welcome to our conference call on the disclosure of Sber’s Consolidated Financial Results for Q2 and the First Half of 2023 under IFRS. The call will start with a presentation by Taras Skvortsov, Vice President, CFO of Sber, followed by a Q&A session.
Before we begin, please note that the conference call is being recorded today, August 3, 2023. The call may include executive forecasts and expectations, which may differ from the actual metrics, going forward. For more information on the risks, please see the disclaimer on the second slide of our presentation.
At this, I give the floor to Taras.
Taras Skvortsov
Thank you, Kirill. Good afternoon dear analysts, journalists. Anyone interested in Sber’s financial results, welcome to this conference call on our results in the first half year of 2023. The second quarter was very successful for us, both in terms of financial results and client metrics. The number of our active retail clients grew to 107.2 million. Client engagement and digital activity remain at a historically high level.
The number of monthly users on SberBank Online increased by 1.5 million since the beginning of the year, and exceeded 80 million people for the first time. Of these, almost 80% of clients or 63.6 million people use their Sber ID for accessing SberBank Online and also for seamless access to various applications and services, with 165 such services available today.
Of special notice, the successful development of our loyalty program SberSpasibo, in the first half year the number of members grew by almost 5 million people and reached almost 71 million. Based on these growing client metrics, and high client loyalty, Sber was able to improve its financial results. In the second quarter, we earned RUB380.3 billion net profit, the highest quarterly results in Sber’s history.
Return on Equity totaled 26%. Profit for the first half year stood at RUB737.5 billion. Importantly, even if we factor in the record high dividends in May and June for 2022 equity has still grown by 2.5% year-to-date, and capital adequacy at the end of Q2 came to a comfortable 13.8%.
Speaking of the components to this result, three quarters of income continued to come from interest income and one quarter from fees and commissions. In addition, in the second quarter in June specifically, Sber closed the sale of its subsidiary in Austria. This important transaction had a positive impact on the bank’s financial results, on the bank’s profit. The effect was recorded as other income.
We were able to keep the interest margin at a high level of 5.8% in the second quarter with the main driver of interest income being the loan portfolio growth. Sber’s assets have already gained 10.4% year-to-date, with the loan portfolio accelerating to 7% in Q2 and growing by 11.8% in the first half year. And the retail segment will continue to see quality demand for mortgages in the second quarter. For the first time in history, we dispersed more than RUB1 trillion in home loans. The mortgage loan portfolio grew 8.1% in the second quarter.
In addition to mortgages, we were quite successful in other market segments. The consumer loan portfolio grew 5.3% in the second quarter, the credit card portfolio by 6.9% and car loans by 14%. The corporate loan portfolio went up 6.7% in April June, and totals over RUB20 trillion.
Sector wise, financing residential construction remains the key area. It grew by more than 17% in 2023 in the first half year to RUB3.4 trillion. The portfolio of chemical, metallurgical and retail clients demonstrated a good growth rate as well. The SME loan portfolio exceeded RUB5.3 trillion, growing 12% over the quarter and almost 20% [Inaudible]. In addition, we have financed — in addition, at the end of the second quarter, the loan-to-deposit ratio stood at 100% because all of our lending growth was driven by a steady inflow of customer funds.
The retail funds segment, which is particularly important for us, gained 8.5% over the quarter and exceeded RUB20 trillion. At the same time, the structure of these funds is improving, for the first time the share of current accounts exceeded 50%. We saw that in real terms, salaries were 9.3% higher than in the second quarter 2022. This majorly contributed to our results in terms of deposits.
Corporate customer funds grew 10.2% in the second quarter. Sber continues to hold leading positions in key segments of [bank] market in Russia but [notable] is that we are also improving them. In the second quarter alone we increased our market share in corporate and retail loans by 0.5 basis points to 32.6% and 45.7% respectively.
With retail deposits, we improved our position by 0.8 percentage points to 44.6%. We see some players of the financial market growing their operations and or rather winding down their operations and for their clients, Sber is the first choice. As I said, net interest margin remains unchanged in the second quarter which is supported by an improved balance sheet structure due to loan growth in higher return segments and an increase in the share of current accounts.
Fee and commission income after a difficult first quarter showed a 20% growth rate in the second quarter and excluding income from conversion operations, almost plus 30%. In total, the growth of fee and commission income excluding conversion income also exceeded 20%. The main growth drivers were classic cash and settlement services and operations with bank cards where the total volume of transfers, payments, and acquiring of the quarter exceeded RUB22 trillion and grew 30%.
In terms of operating expenses, we continued to be efficient. Their ratio to income amounted to 26.1% in the second quarter and 25.5% in the first half year. Cost of risk in Q2 was 1.2%, exactly per our guidance. Provisioning expenses of the retail portfolio normalized in Q2 and we see a good trend in early repayments of consumer loans. It has returned to end 2021 levels.
Overall portfolio quality dynamics are in line with our expectations. The share of Stage 3 loans in the portfolio did not change versus early 2023 and stayed at 3.9%. Meanwhile, provision coverage of impaired loans is well above 100% and at the end of the second quarter, it was at 138.4%. Risk-weighted assets grew 5.1%, mainly due to the loan portfolio growth, the ratio of RWA to assets declined to 82.7%.
In terms of capital adequacy, as I mentioned earlier, despite the payment of record high dividends, the profit in the first half year allowed us to show growth in equity since the beginning of the year, with our key N20.0 Group adequacy ratio of 13.4%, which is comfortable for us.
Let’s talk about our product launches. In the second quarter we continued to develop our technology vertical and improve our Kandinsky neural network, the version 2.2 was released. It can create new artistic meanings and interpretations. At the end of April Sber launched GigaChat, a multimodal neural network in test mode. It answers user questions and generates image from text and it can also write code.
In addition, we brought to the market products that are actively used within Sber, the Navigator analytics platform and the Sber Process Mining platform for intelligent analysis of business processes. Overall, the second quarter bilateral metrics for Sber was, the most successful, in its history.
And next I would like to outline our 2023 guidance according to Sber Index operational data, we see a steady positive trend in many sectors of the economy and in May-June the customer expenses in [indiscernible] and grew 10% in nominal terms. As most analysts, we have improved our forecast for the growth rate of the Russian economy in 2023, from about 1% to about 1.8%.
Even more significantly, we have upgraded our focus for the dynamics on the banking markets, for retail lending by five percentage points to the range between 19% and 21% and for corporate lending by four percentage points, to 17% to 19%. That said, in the retail segment we plan to grow faster than the market. This growth will be balanced out by the acceleration of the retail deposit market. We have improved this dynamics forecast by six percentage points to 18% to 20%.
As for Sber’s financial performance, the second quarter clearly shows that our ambitious forecast is an achievable goal. And we are confidently on track to exceed the record net profit achieved by the end of 2021, which has been improved for us. In terms of individual components to the forecast, we have slightly improved our 2023 net interest margin forecast from around 5.5% to above 5.5%. As the cost of risk, we maintain our forecasts for 2023 at 100 basis points to 130 basis points.
Nevertheless, the improvements in macroeconomic parameters and the current dynamics of risk metrics allow us to be closer to the lower end of the range at the end of the year. This concludes my presentation and I will be happy to answer your questions. Thank you.
Question-and-Answer Session
Operator
Taras, we open the floor for questions and answers. [Operator’s Instruction] And we already have our first questions, the first question from Eugene Kipnis, Alfa Bank. Eugene, no sound coming in, please turn on your microphone. Eugene, we can’t hear you.
Eugene Kipnis
Can you hear me now?
Operator
Yes.
Eugene Kipnis
Okay, let’s do it without the earphones. Thank you very much for the presentation and congratulations on the great performance. I have two questions. The first question is about the recent initiatives by the Central Bank to raise the macroprudential requirements, so to non-collateralized loans and mortgage loans. What effect will it have on your capital adequacy? How an adverse of effect are you expecting? And do you have any reserves, any provisions to optimize the RWA’s, which potentially may offset this adverse effect? This is question one.
And the second question concerns your ambitions with the consumer lending growth in the non-secured segment. Do you think it is possible for you to increase your market share in that segment to a level that is on par with your mortgage share? Thank you.
Taras Skvortsov
Thank you very much, Eugene, for the questions, very topical. As for the initiatives of Bank of Russia to raise the add-ons for home loans and consumer loans, you’re right. This will have an effect on our capital adequacy. That said, I would like to note that in our forecast, in our guidance reflected in the presentation these effects are already taken into account. We will of course be adapting our lending policy to allow for these add-ons of the Bank of Russia especially in the segments with the high debt rates and for home loans with a low initial payment. This will, of course, have a certain effects on the dynamics of the markets and the market players and at the end of the year versus the dynamics without these requirements. Of course they will be slowing down.
Still in terms of critical effect, this is not something we are expecting. It will all depend as we are — with our lending policy, we are still adhering to the system of loan ratings. So this will, I hope mitigate the effects that will be exerted on other market players. As for our ambitions with lending, including unsecured lending, our long term ambitions concern focus on building a better service for our customers, we analyze the level of risk that is acceptable for us. And within that range, we try to implement our ambitions in the first half year, as I said in the presentation, with the credit cards. This product is essentially a part of the consumer loan market. Our share has grown two percentage points and our share is now 48.3%.
As for loans in cash, excluding cards, in the first half year, with the loan balance, we have gained one percentage point to 28.6%. But speaking of the loan disbursements and not the portfolio share, we already occupy 47% of the market. And that’s why our share has been growing so fast in the first months. This all depends on the potential we see for ourselves. And we — if we do see the potential this will result in an increased market share. So that’s what I would like to say about this. Thank you.
Operator
Thank you, Eugene. Next question, [Dmitry Danielski], Solid.
Unidentified Analyst
Hello, can you hear me?
Operator
Yes.
Unidentified Analyst
Congratulations on the tremendous results and these excellent statements. I have two questions. We are observing very strong devaluation of the ruble. What is its effect on the cost of risk on your provisioning expenses and how will it impact your net interest margin? And the second question is about the risks related to the growth in interest rates, we see the Bank of Russia is not going to stop at the current level and may increase it further. What will it have the impact on your net interest margin?
Taras Skvortsov
Thank you Dmitry, as for the devaluation of the ruble, and its impact on our financial performance, I think the most important is the impact of ruble devaluation on net profit. As for that effect, I do not think that is considerable. Of course, it may vary in terms of profits and procurement. But if you add it all up, the total impact, I think would stand closer to zero. As for other parameters, cost of risk for example, currency revaluation, FX valuation under IFRS, is not included in the cost of risk. That is already provisioned for. So, we do not expect a material effect there, either.
As for the interest margin, since the interest margin for FX operations is a little lower than ruble operations, with the increase in the USD rate, there is a structural change and it does impact the margin. But still I think we should rather focus on the interest, total interest income which rose because of the weakening ruble. So with that, we do not expect any adverse effects.
Unidentified Analyst
Now as for the growth of the interest rates, and the key rate hike, especially the recent one, the most recent one, we have always tried to minimize the risks including the interest rate related risks and we have a great, we have good shares in mortgages, in corporate loans and the state supported programs that are basically floating. So we are hedged from this change from these hikes. And in up to one year horizon, the influence of 100 basis points increase or yet another 100 basis point increase is negligible, around zero. As for the longer period if the rate hikes continue, we will actually win since we have a good situation with accounts. And if the regulator in one or two years will drive them down to the levels that we saw them a month ago, then there will be no positive effects and we will basically have a zero effect as if the rates haven’t changed. That’s at all. Thank you.
Operator
Dmitry, thank you for your question. Svetlana Aslanova from Arovana Capital has the next question.
Svetlana Aslanova
Yes, hello. I’d like to ask the question about NIM and the rate hikes influence. You used to disclose the share of the loans given at floating rate? Can you disclose the information about what share of a ruble allowance with a floating rate is in your credit portfolio? And how quickly can you reevaluate the active part of the portfolio?
Taras Skvortsov
Yes, Svetlana, thank you for the question. Our share in the corporate loans has been growing in recent years. And currently, we give around half of the loans at floating rate. And it is, basically reflects our share in the portfolio. As for the retail portfolio, since, as I have mentioned already, the mortgages with the state support programs, is basically for us a loan with a floating rate because apart from the key rate changes, the subsidy volume changes as well. And that means that in the mortgage portfolio, we have quite a lot of loans like that, and it’s around 1/3 of our portfolio of the mortgage portfolio. So you can basically do the math, in terms of the — of the volume of the loans in our floating rate.
Svetlana Aslanova
Great, thank you so much. Next question is about the fee and commission income. That was a pretty stable growth this year and we see that you stick to your guidance as of the results of this year, but next year we might see some barriers. For example, if there is law adopted, that you can, you should not pay commission when you transfer money between your own accounts in different banks and maybe some other payments, it might affect the retail fees, at least. Do you see the growth to — do you think the growth will remain at two digits next year? And what will be the growth points for the fee and commission income in the nearest future?
Taras Skvortsov
Well, I think that you have put it properly, like the challenges that we face in this part. There is a competition for the customers. And basically all the banks try to enlarge their customer base and we’re one of these banks. And I think the main response to these challenges is the end-to-end services delivered to the customers. If a product delivers less margin, it is important for us — for the customers to stay with us. We have some subscription based services. There is a growth of activity across other products and services.
So in terms of commission income, as you have seen, we have been developing quite sustainably and stably in the last several years. And we try to grow the income from fees. As for the dynamics for the next year, I will refrain from comments because we are just discussing the financial model and the strategy for the next three years including the strategy and the financial model for 2024. And we plan to disclose this model at the end of 2023 and there we’re going to answer all these questions in detail.
Svetlana Aslanova
Thank you. Great. And the last question. As part of the mortgage portfolio, what do you see? What do you think will be the growth for the sector and for the bank?
Taras Skvortsov
Well, as I have mentioned, we see the mortgage to be growing, to be the quickest driver in the retail lending. Our forecast for the retail lending, well we have talked about that around 12% to 21% range. That is reflected in our mortgage expectations. The growth could have been higher, could have been more aggressive if the Central Bank — had the Central Bank not implemented the various measures. But we still think that in 2023 the growth range will be at 12% to 21%.
Svetlana Aslanova
Thank you very much.
Operator
Yes, thank you for the questions, and Elena Tsareva from BKS is going to ask the next question.
Elena Tsareva
Hello, thank you very much for your presentation. I have a question about the blocked assets. Can you give us some more details about their volume? Maybe you have some action plan to address that situation? Maybe they can be an unblocked, unfrozen?
Taras Skvortsov
Well as for the blocked assets, the main comment is that we have the ensured that we have provisions for these frozen assets. Whatever the scenario, we don’t see any additional negative effects on our financial result. As for our actions, we are responding to this to the situation all the time, and we were able to get one of our assets back and we receive money for that asset. We are looking at different options, we’re working in all areas, moving in all directions possible, but we can’t really talk about the success stories that have not happened yet. In terms of the assets being unfrozen, but we are confident that we will bear some fruits, but you we will announce the results related to the unblocked assets when we actually have done that. As for now, we cannot really comment on that.
Elena Tsareva
Thank you.
Operator
Elena, thank you for the question. Olga Naydenova from Sinara will put forward the next question.
Olga Naydenova
Hello, thank you very much.
Operator
Olga, can you speak a bit louder?
Olga Naydenova
So I have two questions. Thank you for the call. First question related to the decrease of the provisions for the nonperforming loans. Why have you done that, any comments? Yes and maybe then second question. The second question is related to nonbanking transactions. I see you that there is a sustainable negative result for other expenses, for other transactions. Is it related to the nonbanking businesses that you have? Is it driven by these businesses? And can you tell me about the nonbanking businesses? What can we expect?
Taras Skvortsov
Yes, thank you, Olga. As for the provisions, it’s more than 100%. And we have some changes across this portfolio in Q2. One of the loans was included in this portfolio and this loan. Due to good provisions, it does not need like 100% provisions, provision charge. And the provisions are covering the loans in an adequate manner. As for the other areas of our business, business streams, they have been developing according to the plan and even better, thanks to our commitment and as well as it is related to the fact that the economy is doing much better than expected.
And as I’ve said on last call, we are thinking about disclosing more information, but since we are under the restrictions, but by the regulator, we cannot do that. So, I cannot really tell you more about that. But what — overall, I can tell you that we are happy with the dynamics that we have in our financial as well as non-financial business streams.
Olga Naydenova
Thank you. But can you at least tell me, are there any positive financial results for the, for example, non-state pension fund business or the insurance business?
Taras Skvortsov
Well, you see that we are regularly disclosing the results across the bank. And now we see the results across the group, you can compare them with the previous results. So you can easily calculate that our subsidiary companies deliver the profits. I’m not going to go into details in terms of what company delivers what profit, but you can see the positive results.
Operator
Thank you. We have some questions from the webinar chat. The first question, Taras, could you tell me what is your Austrian assets sell-off? What did it deliver in terms of the financial results? Because we don’t see it reflected in the provisions?
Taras Skvortsov
Well, yes, you won’t find any influence on the provision charges from our sell-off of the Austrian companies because other income that was the item in the report that was affected. And it was good increase. It was a very positive effect on our financial results. But we’re not going to disclose the total amount.
Operator
There is a second question, why do you think the ROE expectation is not that aggressive, 22% for the entire year? Because in the first half of 2023 it was 25.5%, do you expect the ROE to decrease significantly in the second half of the year?
Taras Skvortsov
Well, you know, there were some positive events in the first six months, including this deal that we have closed with the Austrian asset and other deals. Now the regulator is implementing a number of measures that restrain our development and the development of the markets on the whole. And we see that the provision charge is increasing that will affect the margin. The dividend payout that happened also affected the results. So yes, in the next six months, we expect the ROE to go down compared to the first six months. But currently, we think that the expectation of more than 22% is very ambitious. And it would be unreasonable to increase it by 1% or even 2%. We are committed to delivering the best results possible and it is for sure going to meet our expectations, so whatever the result is.
Operator
Thank you, and the last question. Where does Sberbank send the other half of the net profit that remains after the dividend payout?
Taras Skvortsov
Well, the Sberbank has traditionally been growing and developing its businesses based on our own revenue streams, and this second half of the net profit is this source. And the larger credit — our credit portfolio is and the more actively we’re driving up our businesses, the more money we need to ensure that growth and development. So there is a direct connection here. And the part of the profits that we have for the development is what we need. Otherwise, there would have been no development. And that is positively affecting the dividends and the shareholders. And that affects them positively because we invest in the development and we’ll be able to pay more dividends next year.
Operator
Thank you. Next question from Ilya Marochenkov from PFL Advisors.
Ilya Marochenkov
Yes, thank you very much, and congratulations for the results. So the market is very happy with these results. Maybe to add on as annex of the previous question, you said that the Sber’s payout is 50%, that’s the kind of a trend that we see in Sber. Will the payout increase? Or maybe there will be some additional condition for the dividend payout if the, for example, ROE is higher than some level? Thank you very much.
Taras Skvortsov
Ilya, thank you, these questions are the right questions. And our shareholders are very much interested in that. But dividend payout is very closely related to the business development plans, and with the restrictions that the regulator is implementing in terms of the capital adequacy ratios and the dynamics of the market is yet another influence factor. So we are — it is a very important part of our strategy we’re discussing it right now. And in December, we plan to disclose our vision.
But one thing for sure, people put forward this question to us all the time and our answer is the same. We do not plan to change the periods when we pay out the dividends. We think that paying out dividends based on the performance of the previous year is in line with the current risks and the situation with the volatility that we have right now here. And it helps us to adequately plan our further activities. So there will be no major changes here. As for the other questions related to that, we’ll discuss them in details. We’re going to discuss all of the conditions, triggers and factors that will influence our decision.
Operator
Thank you very much, Ilya. And we’re moving to the journalist’s questions, Olga Sivkova from Commerce and who will ask the next question.
Olga Sivkova
Hello, I have a number of questions mostly related to the deposit inflow costs. In Q2, there was a growth of retail and corporate portfolio, what is — how it — what it was backed with and also there is a increase of the rates for the corporate deposits. Was it a measure that you had to implement and what about the next quarter?
Now, the retail deposits are not going to change in terms of the interest that you pay. And as for the Austrian deal, why did you put it in the item that is called other income? Why haven’t you put it in the other item of the reporting? Thank you.
Taras Skvortsov
Thank you very much, lots of questions. I’ll try to answer them all. As for the increase in the portfolio, profitability of the retail portfolio profitability, the main factor that plays in that favor, was that the loans are repaid. The loans have had been dispersed during the periods of lower rates, mainly home loans. They were replaced with the current interests and it’s no secret, right now the mortgage rates factoring in the states of all program are lower than, say, three years ago.
As for the retail deposits, you might have seen the reports now, we have a big share of those mainly short term, not long duration. And in the second quarter, we all already observed this trend toward an increase in rates in the market. So, this segment, the specified segment is the most sensitive to changes in rates, there is a huge competition going on in the market for this [passive] segment and so an increase in their value is a directly correlates with that.
As for our guidance regarding the cost of borrowings from retail customers, along with the Bank of Russia decision to increase the interest rate, we immediately announced our increase ruble deposit rates. We increase the rates across the board across the whole product range in that segment, and we expect to see in the third quarter and the fourth quarter, an increase in the value of passive borrowings. Some clients may refrain from taking advantage of this proposition and there won’t be a miracle happening. We also see a trend towards prolonging of the term of deposits. So, this is one of these factors that are influencing a decrease in the interest margin in the second half year.
As for the procedure for recording the transaction, we adhere to the reporting standards since we do not — since we no longer have this acid, the income from the sale was registered as other income not as provisions. I think this is more of a technical issue in the statements, so it is recorded as it should.
Olga Sivkova
Thank you Taras.
Operator
Thank you, Olga. Tatiana Tsubasa Interfax, the floor is yours.
Tatiana Tsubasa
Tatiana, please turn on your mic.
Tatiana Tsubasa
Do you hear me now?
Operator
Yes.
Tatiana Tsubasa
Two questions, so one about the windfall tax, you more or less touched upon it, the prepayment, but could you clarify maybe — may be you have the recalculated it? And also when is Sber planning to actually pay it? And the second question is about rates. But on the asset side, there are a number of banks, large banks that have announced an increase in the mortgage rates in August after the increase in the key rates. Is Sber planning to follow along?
Taras Skvortsov
Thank you, Tatiana. As for the tax, we are monitoring it. We are monitoring the process and we are waiting for the actual signing of that regulation. Of course, if we have the opportunity, we do plan to pay it before the end of the year in accordance with the current version of the law. As for the size of the tax under law, not just the bank but also a number of our subsidiaries have to pay it. They have to pay the tax for excessive income in a certain amount. But as of today, we see that we will be able to comply with the estimates that have previously been announced and this tax is also included in our profit guidance for 2023. We will announce the concrete amount after the law is signed, so just not to make a mistake and to avoid premature estimates. Thank you, Tatiana.
All right, you had this second question about mortgage rates. Good question. We are considering it. As for the decision, we will announce the decision once it’s made, we are currently discussing it.
Operator
Thank you. Next question from Yulia Koshkina, RBC.
Yulia Koshkina
Hello, can you hear me?
Operator
Yes.
Yulia Koshkina
I had a question about the following. Do you assume that there will be an effect on the net profit of certain one-time factors like in the first half year, for example, the sale of your Austrian subsidiary. So, do you expect any similar one-time unexpected excessive income, such as income from a sale of your business or from FX revaluation? Thank you.
Taras Skvortsov
Thank you, Yulia. As for our forecasts, the forecast that we are reporting today does not factor in additional one-time incomes. It is based on our core business and we plan to achieve the ROE metrics as expected without any additional effects. And if these effects materialize, there will be bilateral to — they will be lateral to our forecast.
As for the FX revaluation, I’m afraid I’ll have to repeat the same thing I said about the interest risk. Last year, we already acknowledged the possible high risks associated with the FX revaluation. We have tried to do our best to mitigate it and this year we have continued to minimize FX risk across the board. So the volatility of foreign currencies vis-a-vis ruble they do have some effect but it is not material at all and we do not expect any significant effects either positive or negative. Our risk management team is among the best in the market and we are confident that it will not let us down neither in the second half year nor going forward.
Operator
Thank you one more question from Ilya Ilyin from Promsvyazbank.
Ilya Ilyin
What is included in the project finance? So, what is the share of construction and what are the drivers behind the loan demand?
Taras Skvortsov
Thank you, thank you for the question, Ilya. As for construction, and our construction portfolio, as I said in my presentation, RUB30 trillion to RUB40 trillion rubles, we have drivers coming from different segments. We are have a non-diversified portfolio and as for growth and speaking of customer segments, the main growth is observed in the segment of middle-sized, small, and micro business. It helps us to continue to support this diversification. But broadly speaking, project finance is roughly 1/3 of the corporate portfolio, 2/3 regular commercial lending.
Ilya Ilyin
Thank you.
Operator
At this point, we are ready to conclude this call. Thank you for joining us. And I give the floor to Taras for some closing statements.
Taras Skvortsov
Thank you very much. Thank you for participating and for the great questions. Thank you for being so demanding and for encouraging us to disclose. We hope that the answers were to your satisfaction, the answers as well as the results. We will do our best to continue to make you happy. We will of course continue to adhere to the openness and disclosure policy, and next week, we are planning to disclose our results for July. I really hope they will not let you down.
Thank you very much, and see you at the next call. Bye-bye everyone.
Read the full article here
