Sovcombank announces financial results under IFRS for 2024

Sovcombank's revenue doubled last year to 722 billion rubles. The growth was driven by record volumes of lending, issuing bank guarantees, insurance and commission services, the bank said in a press release.

Regular net profit increased by 19% compared to 2023, to 76 billion rubles. At the same time, its growth was limited by increased funding costs and operating expenses.

Net profit decreased by 19% and amounted to 77 billion rubles (3.73 rubles per share), as in 2023 the bank received significant one-time revenues that were absent in the reporting period. The profit was also affected by a one-time negative revaluation of the securities portfolio due to market volatility.

Sergei Khotimsky, First Deputy Chairman of the Board of Sovcombank, stressed that the decline in "net profit after a record 2023 was expected, given that the bank has historically not been a beneficiary of rate increases." "We could not expect a significant result from irregular earnings with such an increase in rates.
At the same time, we have significantly strengthened the foundation for further growth, especially given the completion of the rate hike cycle," he added.

The bank's assets increased by 27% year—on-year to 4 trillion rubles, and its capital increased by 31% to 390 billion rubles. This included subordinated debt of 57.8 billion rubles, dividends of 23.5 billion rubles paid in July and 11.5 billion rubles raised from investors during the IPO in December 2023. The return on equity (ROE) was 26%.

Khotimsky noted that this year the main challenge will be the credit risk associated with a slowdown in the economy, rate pressures, lower demand in the corporate sector and credit squeeze in retail. "The key objective for 2025 will be to increase the contribution of LLM models to ROE from 0.2% to 4%. The time has come to move from the implementation of dozens of projects to the large-scale implementation of thousands of AI initiatives that will transform the daily work of all divisions of the bank," added the first Deputy Chairman of the Board of Sovcombank.