Sberbank shares collapsed to 2.5 month lows

On Monday, Sberbank's shares experienced a sharp decline due to decreasing profits.

November's financial results were presented by the country's largest bank.

Sberbank securities have dropped 11% since their peak in late November.

On Monday, Sberbank shares dropped 3.1%, settling at 256.89 rubles. Since November 27, the securities have been in a downward spiral, losing 11% of their value in the span of two weeks.

The bank presented its RAS financial statements for November and the 11 months of 2023 on Monday morning. According to RBC, Sber earned 115.4 billion rubles in November of this year, which was 7.4% lower than the same month in 2022. The net profit for the 11 months of 2023 was 1.38 billion rubles.

BCS reported that, although a slowdown was anticipated last month, profitability levels stayed high at 22% in November and 25% for the 11 months prior, which confirms the generally optimistic outlook for the stock.

In November, profits decreased due to a decrease in lending growth caused by the Central Bank's ongoing implementation of stricter regulations.

BCS calculations show that Sberbank has earned potential dividends of 30.5 rubles per share (with 50% of net profit paid out) over the 11 months of this year. This gives a dividend yield of 11.8% at current prices.

Tinkoff Investments is forecasting that dividends per share for 2023 will be at least 33 rubles, and that the target levels for Sberbank securities will remain around 296 rubles. This implies a potential upside of approximately 15% from current levels.

At last week's Investor Day, Sberbank unveiled its strategy for 2024–2027 and a new dividend policy. Under the policy, the bank must distribute 50% of its net profit according to IFRS as dividends, provided that its capital adequacy is above 13.3%.

German Gref, the head of the Sberbank Group, has announced that the organization plans to transition to a human-centric business model and create a "new generation" of artificial intelligence (AI) between 2024 and 2026.

Taras Skvortsov, the Vice President and head of the Finance block of Sberbank, has declared that next year will be even more successful than the current one, which has already become a record year.

Although experts interviewed by RBC Investments are confident that the bank will be able to reach its financial goals, some have cautioned that 2024 may be a challenging year due to the high interest rate.