Publicly listed Russian Sovcombank posted a 50% year-on-year decline in IFRS net profit to RUB12.5bn ($172.8mn) for 1Q25, as monetary tightening and a stronger ruble weighed on core banking operations, according to the financial report released by the bank.

As followed by bne IntelliNews, the bank is in focus as it bought the Home Credit Finance Bank (HCF), following SovComBank's first banking IPO since 2015.

In 2024 Sovcombank posted a 19% y/y decline in IFRS profit to RUB77bn ($847mn) for 2024, while still maintaining a return on equity (RoE) of 25%. Despite the profit drop, revenue doubled to RUB722bn ($8bn), up from RUB395bn in 2023, while total assets grew by 27% y/y to RUB4 trillion ($44bn). 

In the reporting 1Q25, Sovcombank’s loan book contracted 1.4% quarter on quarter due to a reduction in corporate lending. Non-performing loans (NPL over 90 days) rose by 0.8 percentage points to 3.7%. Customer deposits fell 7.1% q/q, also driven by corporate outflows. 

Net interest margin declined by 0.6pp to 3.7%, and net interest income dropped 1.9% y/y amid higher funding costs.

The non-banking segment posted a net profit jump of 3.4x y/y to RUB13.2bn ($182.5mn), but this was wiped out by a foreign exchange loss of RUB20.6bn ($284.8mn).

Analysts at Renaissance Capital no longer expect a dividend for 2024 due to weakened capital adequacy. Sovcombank’s RAS N1.0 capital ratio stood at just 9.4% at end-1Q25, below the 11.5% minimum required for dividend payouts. 

SovComBank was one of the first banks to come under full blocking sanctions upon Russia’s full-scale military invasion of Ukraine. But the bank was also the first to recently extract sanctioned assets under a regulatory loophole provided by the Central Bank of Russia (CBR).