Promsvyazbank came out on the 4th place in Russia in terms of assets, net profit – about 24 billion rubles.

Promsvyazbank (PSB), which has been actively expanding its business in “new territories” since the outbreak of hostilities in Ukraine, has significantly increased revenues in 2023. The net profit of PSB under RAS for the first quarter, calculated by Kommersant and confirmed by the bank, turned out to be higher than the annual results until March 2022. In terms of assets, the bank moved to fourth place in Russia, displacing Alfa-Bank.

The net profit of PSB for the first quarter of 2023 according to RAS amounted to 24.96 billion rubles. This result follows from published data Central Bank of the net profit of banks, ranked by assets, and the reporting of the credit institutions themselves. The PSB itself did not disclose reporting either for 2022 or for the first quarter of 2023. The calculated indicator turned out to be higher than the annual profit that the bank showed in 2006-2021. In particular, in 2021 PSB received 22.7 billion rubles. net profit under RAS.

The bank confirmed the figures that Kommersant received based on calculations. “PSB earned 25 billion rubles. net income for the first quarter of 2023. A strong financial result is mainly the effect of growth in business volumes while maintaining an adequate level of costs and cost of risk,” the bank noted.

The PSB also reported that the bank’s assets as of April 1, 2023 reached 6.3 trillion rubles, having increased by 70% over the past year and a half.

As a result, PSB moved into fourth place in terms of assets among Russian banks, displacing Alfa-Bank (5.65 trillion rubles). PSB head Pyotr Fradkov reported to Russian President Vladimir Putin in January of this year that the bank, following the results of 2022, became the fifth in terms of assets, which reached almost 5 trillion rubles.

According to the bank, “high dynamics is due to the scaling of the business model of a universal bank, which includes both the implementation of the function of a reference bank for defense industry enterprises, and the development of corporate and retail business segments, including in Crimea and new constituent entities of the Russian Federation.”

Since June 2022, PSB has been actively developing business in the DPR and LPR. By June 2023, the total client base of the bank in these two regions, taking into account the merger of PSB Donetsk LLC and PSB Luhansk LLC (the former central banks of the DPR and LPR), as well as the opening of new branches, totals more than 2.3 million individuals. The number of corporate clients working with PSB is about 70,000.

As Yury Belikov, Managing Director for Validation at Expert RA, notes, the bank’s profit growth rate “significantly exceeds the asset growth rate.”

However, he points out that the bank still does not disclose financial statements, so it is impossible to reliably analyze the drivers of the financial result. At the same time, Mr. Belikov believes that, “like many other large banks, the first quarter profit could have been positively affected by currency revaluation, lower reserve deductions, as well as the cumulative interest flow from the continued growth of the loan portfolio.”

The expert clarifies that “further on, the dynamics of the financial result from should normalize”, and quarterly profit should decrease relative to the record at the beginning of the year. “This is likely to be affected by the maturation of loans, some slowdown in issuance, which may occur in the system as a whole as effective demand decreases, and the expected increase in funding costs,” explains Mr. Belikov.

In addition, the consolidation of other credit institutions may have a dampening effect on the performance of the PSB, especially if there are assets on their balance sheets that require additional provisioning. In particular, on May 1, 2023, the PSB attached previously transferred to it by the Ministry of Bank (its financial results were also not disclosed either for 2022 or for the first quarter). In addition, at the end of 2022, the bank I bought SMP Bank, including its subsidiary Mosoblbank (is in the process of financial recovery, see below). “Kommersant” dated January 21), however, the timing of integration for these assets was not officially disclosed.

Olga Sherunkova