Mark Rubinstein studied at the Russian Economical Academy in Moscow. He then later graduated with a Bachelor of Business Administration from New York City University. He also holds an MBA in Finance from Zicklin School of Business at Baruch College in New York. In addition Mark received Certificate in International Business and Finance from the NYU Stern School of Business.
Rubinstein began his career in 1995 as a financial analyst in New York. He then worked for Salomon Smith Barney Inc. as Assistant Vice President in the Global Fixed Income Credit Research Unit, and for the New School University in New York as a Director of Capital and Facilities Budget.
Rubinstein joined IFC METROPOL in 2006. In both 2008 and 2009, Mark was a top-15 ranked analyst in the Institutional Investor All Russia Analyst Survey in the Financial Services category.
Core revenues – net interest and commission and fees income – were up strongly in 2Q, reflecting fast loan book growth and rising pricing power
VTB reported 2Q 10 earnings of RUB 9.8n, beating market estimates of RUB 9.5bn. More importantly, it beat consensus on core revenues, loan book growth and asset quality.
Net interest income rose a substantial 6% q-o-q in 2Q (Sberbank: -11%) boosted by far-above market loan book growth of 11% (4.5% – overall sector) and apparent significant pricing power on both liabilities and assets. The former is underscored by a 4% decline in net interest expenses over the quarter despite strong growth in customer accounts (+8.6% q-o-q).
Net commission and fees revenues increased by 31% q-o-q, driven by higher loan issuance, increased customer traffic and significant contributions from the investment banking business (more details on this are provided below).
Thanks to NII growth, the bank’s NIM clocked in at a historic high of 5.7% for 1H.
We anticipate strong results beating market consensus, driven by continuing market share gains in both commercial and investment banking segments
VTB is scheduled to publish 2Q 10 IFRS results on Thursday, September 2, at 10 am Moscow time. We expect a bottom line of RUB 10.1bn, or 6% above the market consensus estimate of 9.5bn.
The ongoing downward repricing of the loan book is likely to put slight pressure on NIM, which could be limited by rapidly declining liability costs.
We anticipate that net interest income should decline by only 2% q-o-q in 2Q, as we expect net interest margin (NIM) to contract by a minimal 0.2ppt q-o-q to a still strong 5.4%. Fee and commission income is expected to grow by 15% q-o-q.
We view Sberbank’s 2Q 10 results as good, despite bottom line coming in below consensus, as all other important lines met expectations and lending is expanding
Sberbank reported 2Q 10 earnings of RUB 21bn vs. market consensus of RUB 23bn and our estimate of RUB 30bn. Net income missed our forecast only as a result of higher loan-loss provisions and significantly lower trading income, as core revenues were in line with expectations.
Net interest income fell 11% q-o-q, in line with our and market expectations, with net interest margin (NIM) losing 1.1ppt as expected. Sberbank’s management expects NIM to decline further, but at a much slower pace. Fees and commissions income looked very strong, adding 22% q-o-q.
Importantly, lending portfolio grew 1.2% in 2Q after declining for the previous four quarters, which is a very positive sign, in our view. Retail loans led the way, rising by 4.6% q-o-q. Corporate loans also increased, up 0.2% q-o-q. Sberbank forecasts corporate lending growth of around 6.7% for the full year and expects double-digit growth in retail loan portfolio.
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