The profit of Russian MTS Bank under IFRS in 3Q24 declined by 21% year on year to RUB4.1bn, making a return on equity (ROE) of 16%. Profit still increased by 8% y/y to RUB12bn (ROE of 18%) in 9M24 overall.

In 3Q24, MTS loan book, mainly comprised of retail loans, grew by 7.4% quarter on quarter (15.5% year to date), while customer deposits added 13.6% q/q (13.7% ytd). 

Net interest margin declined in 3Q24 (to 9.2% percentage points, Renaissance Capital analysts estimated), which held back net interest income growth.

As followed by bne IntelliNews, in 2024 MTS Bank held an IPO on Moscow Exchange expectedly offering a significant discount to the listing price. The bank is mainly operating in a highly competitive segment of retail banking services, which has been under pressure from high interest rate and tighter regulation.

MTS Bank intends to pay dividends based on 2024 results (25-50% of net profit in accordance with the current dividend policy) and the bank also presented its 2027 strategy.

The strategy plans to expand the product line for retail customers (debit cards, BNPL and other transactional services), aimed at growth of fee and commission income, increase of cross-selling and reduction of funding costs. The target ROE is set at 20-25%. 

MTS Bank could also participate in M&A transactions in complementary segments (car loans, insurance), as well as secondary public offerings (SPOs) to increase capital.

MTS Bank was ranked 24th in terms of assets in the Interfax-100 bank ranking at the end of 2023. The bank is owned by the telecom company MTS, 42.085% of which is owned by AFK Sistema multi-industry investment conglomerate. 

The bank's IFRS net profit in 2023 increased 3.8-fold to RUB12.5bn. The retail loan portfolio grew by a third to RUB339bn. Revenue grew by 36% to RUB91bn. The bank's customer base at the end of 2023 stood at 3.8mn people.