Russia's Sber grows ecosystem to 4% of revenues, still in red

Russia's Sber grows ecosystem to 4% of revenues, still in red
Sber increased the share of its ecosystem in its revenues
By bne IntelliNews April 30, 2021

Russia's largest bank state-controlled Sber (former Sberbank) increased the share of the ecosystem in its revenues from 1% to 4% as of end of 1Q21, The Bell writes. In 2020 the ecosystem revenues amounted to RUB71.4bn ($0.95bn). In 4Q21 alone, the bank's ecosystem revenues almost quadrupled to RUB33.6bn under IFRS.

As reported by bne IntelliNews, in 1Q21 Sber posted a record profit of RUB300bn, made a return on equity of 24%, and increased the number of retail clients to over 100mn.  

At the same time, the bank is pushing the Sber rebranding, and promises to double online ecosystem investments over the next three years.

On the conference call following the publication of IFRS results, the management said that the contribution of digital non-financial services to Sber’s revenue in 2021 is now expected to be at least RUB200bn versus the previous guidance of at least RUB140bn.

In addition to the upgraded top-line guidance for the ecosystem, Sber presented SberPrime+, an upgrade to its existing SberPrime subscription package. 

SberPrime+ includes financial service offerings – such as free P2P transfers, free cash withdrawals globally and free text notifications – in addition to the services provided by the existing SberPrime subscription service, Sova Capital commented on April 30.

Sber reiterated the previous statements by CEO German Gref and First Deputy CEO Lev Khasis regarding the continuing expansion of the O2O joint venture with in transportation and foodtech, despite several reports that the joint venture is on the verge of a divorce.

The Bell reminds that previously Gref expected the e-commerce to break even in about five years, and media and entertainment in three to four years. The previous target was to increase the share of ecosystem to 5% of total revenues by 2023 and bring it up to par with the banking business by 2030.

However, in 1Q21 the ecosystem remained in red with a loss of RUB8.7bn, with only B2B segments such as cyber-security and cloud services posting a profit of RUB1.3bn. E-commerce showed negative EBITA of RUB4.3bn, transportation and foodtech a negative RUB2.4bn, and in entertainment and media a negative RUB1.6bn.

Notably, the online cinema Okko that Sber intends to turn into a market leader this year saw a 21% outflow of subscribers to 1.9mn on an otherwise growing market.