FINANCIAL RESULTS REVIEW
In 2022, operating income grew by 52% to a record RUB 83.5 bln. Total fee and commission (F&C) income declined by 10% YoY. The share of operating income accounted for by F&C was 45% in FY’22. F&C income decreased on almost every market. The only market that showed an increase in F&C income was the FX market, which was up 35% year-on-year.
Operating expenses added 16.2% YoY. EBITDA increased by 28.4% YoY; and EBITDA margin was 59.5%, 11 p.p. lower than in 2021. CAPEX for the year stood at RUB 4.2 bln. Net profit was up by 29.2% to a record RUB 36.3 bln.
2017 | 2018 | 2019 | 2020 | 2021 | 2022 | Change 2022/2021 (%) | |
|---|---|---|---|---|---|---|---|
Operating income | 38,538.9 | 39,901.4 | 43,229.5 | 48,591.0 | 54,868.9 | 83,495.3 | 52.2 |
Fee and commission income | 21,207.6 | 23,647.1 | 26,181.4 | 34,268.2 | 41,554.0 | 37,487.2 | -9.8 |
Net interest and other finance income | 17,285.3 | 16,061.0 | 16,713.0 | 14,158.7 | 12,902.2 | 45,628.4 | 253.6 |
Other operating income | 46.0 | 193.3 | 335.1 | 164.1 | 412.7 | 379.7 | -8.0 |
Operating expenses (other than other operating expenses, movements in allowance for ECLs and other impairment losses and provisions) | -13,431.8 | -14,453.7 | -15,435.3 | -16,750.0 | -20,514.6 | -23,843.2 | 16.2 |
Operating profit | 25,107.1 | 25,447.7 | 27,794.2 | 31,841.0 | 34,354.3 | 59,652.1 | 73.6 |
EBITDA | 28,059.6 | 27,712.0 | 28,726.7 | 35,188.9 | 38,671.2 | 49,671.0 | 28.4 |
EBITDA margin, % | 72.8 | 69.5 | 66.5 | 72.4 | 70.5 | 59.5 | -11.0 p.p. |
Net profit | 20,255.2 | 19,720.3 | 20,200.6 | 25,170.5 | 28,097.5 | 36,291.1 | 29.2 |
Basic earnings per share | 9.0 | 8.8 | 9.0 | 11.2 | 12.5 | 16.1 | 29.1 |
FEE AND COMMISSION INCOME
F&C income was down 9.8% to RUB 37.5 bln as non-resident trading volumes lowered and RUB asset prices declined. Fee and commission income remained well diversified, with MOEX’s largest market, the Money Market, accounting for 25% of the total.
2021 | 2022 | Change 2022/2021 (RUB mln) | Change 2022/2021 (%) | |
|---|---|---|---|---|
Money Market | 11,699.1 | 9,497.0 | -2,202.1 | -18.8 |
Depository and Settlement Services | 8,396.3 | 7,806.5 | -589.8 | -7.0 |
FX Market | 4,191.4 | 5,661.6 | 1,470.2 | 35.1 |
IT services, listing, financial marketplace fees and other fees and commissionsThe amount of fees and commissions for the sale of software and technical services, information services, listing services, financial marketplace and other fee income. | 4,436.4 | 5,510.9 | 1,074.5 | 24.2 |
Derivatives Market | 5,198.4 | 3,741.3 | -1,457.1 | -28.0 |
Equities Market | 5,200.8 | 3,266.3 | -1,934.5 | -37.2 |
Bond Market | 2,431.6 | 2,003.6 | -428.0 | -17.6 |
Money Market
Money Market fee income decreased by 18.8%, despite a 41.2% increase in trading volumes. The effective fee dynamics is mainly explained by the 38% decline of the average repo terms. GCC repo volumes improved by 58.8% to reach RUB 133 trln. Trading volumes of repos with the CCP improved 22.6%.
Depository and Settlement Services
Fee and commission income from depository and settlement services decreased by 7.0% as average annual assets in custody lost 12.9% YoY. The decline is primarily attributable to the negative share price dynamics (-30.2%). Fee and commission income is also influenced by other services, mainly for collateral management and clearing by NSD.
FX Market
Fee income from the FX Market was up 35.1% while trading volumes decreased by 16.8%. Spot volumes added 5.5%, while swap volumes declined by 26.2%. The effective fee dynamics was driven by two main factors: a shift of the trading volume mix towards the more profitable spot segment and the introduction of updated tariffs from 1 August, which contributed to increased liquidity and supported the effective fee.
IT services, listing, financial marketplace fees and other fees and commissions
The Other fee income line changed mainly due to the results of the personal finance platform Finuslugi as well as the Commodity Market. Sale of software and tech services improved by 7.7%. Listing and other services decreased 24.3% as primary market activity deteriorated. Sales of information services declined by 5.7%, primarily on the back of RUB appreciation during the year.
Derivatives Market
Derivatives Market fee income was down 28.0% as trading volumes declined by 50.9% following the termination of non-resident trading. The discrepancy between fee income and volume dynamics was the result of a shift in volumes’ mix towards FX derivatives and the new asymmetric tariff structure implemented in June 2022.
Equities Market
The total market capitalization of the Equities Market at the end of 2022 was RUB 38.4 trln (USD 530.1 bln). Fee and commission income from the Equities Market fell by 37.2% on the back of a nearly identical decrease in trading volumes as non-residents ceased trading.
Bond Market
Fees and commissions from the Bond Market decreased by 17.6% amid a 30.9% decline in trading volumes (excluding overnight bonds). Primary market volumes (excluding placements of overnight bonds) were down 25.4% driven primarily by lower placements of Russian government bonds (OFZ) and Bank of Russia bonds (OBR) in a volatile interest rate environment. Secondary market trading volumes declined by 35.5%. Effective fee dynamics were driven by the migration of trading volumes to value-added CCP-based trading modes.
NET INTEREST AND OTHER FINANCE INCOME
Net interest income (NII) increased 3.5 times to reach RUB 45.6 billion on the back of higher average interest rates for the year and increased volume of the investment portfolio. NII less realized gains or losses on investment portfolio revaluation (core NII) grew by 276%.
OPERATING EXPENSES
2021 | 2022 | Change 2022/2021 (RUB mln) | Change 2022/2021 (%) | |
|---|---|---|---|---|
General and administrative expenses | 10,632.9 | 11,860.9 | 1,228.0 | 11.5 |
| 2,717.6 | 3,184.4 | 466.8 | 17.2 |
| 1,912.1 | 1,779.9 | -132.2 | -6.9 |
| 835.5 | 1,563.6 | 728.1 | 87.1 |
| 971.9 | 1,176.0 | 204.1 | 21.0 |
| 787.8 | 951.2 | 163.4 | 20.7 |
| 629.6 | 808.0 | 178.4 | 28.3 |
| 328.6 | 453.3 | 124.7 | 37.9 |
| 764.1 | 438.4 | -325.7 | -42.6 |
| 620.8 | 389.5 | -231.3 | -37.3 |
| 337.9 | 350.3 | 12.4 | 3.7 |
| 433.5 | 202.9 | -230.6 | -53.2 |
| 13.5 | 119.9 | 106.4 | 788.1 |
| 34.9 | 114.1 | 79.2 | 226.9 |
| 104.3 | 103.9 | -0.4 | -0.4 |
| 140.8 | 225.5 | 84.7 | 60.2 |
Personnel expenses | 9,881.7 | 11,982.3 | 2,100.6 | 21.3 |
| 7,839.0 | 9,758.0 | 1,919.0 | 24.5 |
| 1,620.8 | 1,960.0 | 339.2 | 20.9 |
| 372.6 | 228.6 | -144.0 | -38.6 |
| 49.3 | 35.7 | -13.6 | -27.6 |
Operating expenses added 16.2% YoY, well within the top end of the guidance range of less than 20% for 2022. The key drivers of the increase in OPEX were:
- rolling out the Finuslugi promo campaign in 2022,
- an increase in personnel expenses due to additional bonus provisioning,
- an increase in amortisation costs of intangible and tangible assets due to increased capital expenditure.
Capital expenditures
CAPEX for the year was RUB 4.18 bln, in line with the guidance range of RUB 3.8-4.3 bln for 2022. It was mostly attributable to purchases of software and equipment as well as software development.
Cash and cash equivalents
The cash position Cash position is calculated as the sum of Cash and cash equivalents, Financial assets at fair value through profit and loss, Due from financial institutions, Financial assets at fair value though other comprehensive income, Current tax prepayments and Other financial assets less Balances of market participants, Overnight bank loans, Distributions payable to holders of securities, Margin account, Liabilities related to assets held for sale, Current tax payables and Other financial liabilities. at the end of 2022 was RUB 107.33 bln. The company had no debt as of the end of the reporting period.