Maxim Builov about the achievements and risks of NSPK

The Bank of Russia can be proud of the financial results of one of its key subsidiaries – JSC National Payment Card System (NSCP). Last year, the Mir payment system operator showed strong results – net profit increased by 40%, to 35 billion rubles. And this despite significant expenses on joint promotions (1.5 times, to 10.6 billion rubles) and payments under loyalty programs (almost 1.7 times, to 5.76 billion rubles). Moreover, last year NSPK paid excess profit tax in the amount of 1.8 billion rubles.

It turns out that, at least until recently, the numerous restrictions that unfriendly states impose on the Russian financial system exclusively benefited the NSPK. Meanwhile, the restrictions not only eliminated competitors from the international Visa and Mastercard.

Back in the fall of 2022, the United States warned financial institutions around the world that by cooperating with the NSPK, they risk violating sanctions. To be fair, Washington did not include the system in the SDN List, although it added the then head of the NSPK Vladimir Komlev to it. Many banks in different countries have already begun to refuse to accept Mir cards in response to this, and the United States has continued to increase pressure. In January, Mr. Komlev left his post, but now the NSPK itself has been included in the SDN List.

Theoretically, both indirect and direct sanctions could worsen the situation in the NSPK. The international part of the business was not and has not become significant for the system, but problems with equipment and its service, software, and so on, common to all financial organizations, have not been canceled. It is quite possible that they will still appear. But for now, NSPK is increasing revenues, profits and dividends transferred by the Central Bank.

This is not the best news for Russian banks. The fact is that bankers from time to time remind the Central Bank that at the start of the formation of the NSPK the regulator spoke about the possibility of its corporatization in the future. Ten years have passed, the future has arrived, but the privatization of the Mir payment system operator has not become any closer. Which is not surprising: the Bank of Russia itself made a profit last year for the first time since 2017, and more than 10% of it comes from NSPK dividends. It is naive to believe that the Central Bank will want to share such a profitable asset with investors, for example banks, who already earn good money.

The only real threat to the regulator, it seems, is that NSPK’s profits, and with it dividends, will increase so significantly that the government will pay attention to the conflict of interest. After all, in the payment market the Central Bank now acts as both a regulator and a participant through its ownership of the Mir operator. By analogy with Sberbank shares, the contradiction can be resolved by transferring NSPK to the jurisdiction of the Ministry of Finance, and then the sale is not far away. The budget needs revenue, and the government has already announced plans to expand privatization.