Guillermo Nieto of Salmon Mundi Capital presented his in-depth investment thesis on Sberbank (UK: SBER) at European Investing Summit 2019.

Thesis summary:

Sberbank is the leading Russian bank. It has a 45% market share in retail deposits and a 31% market share in corporate loans. They are the leading major bank in terms of profitability with a 24% ROE and they are very efficient in terms of costs with a 33% cost to income. NPLs are contained at 4%, which is better than the system and it has a sound capital ratio: Tier1 12.3%. The bank is trading very cheap at 5.6x PER and 1.2x PB. We think Russia as a country it is interesting for banks since the country has a low level of debt: overall private and public debt is c80% of GDP, much lower than other developed or other emerging market countries, the Russians have a high percentage of their financial assets (c65%) in deposits and overall the country is very cheap at 7x CAPE.

Read Guillermo’s preview article on Sberbank.

Listen to this session:

slide presentation audio recording

About the instructor:

Before Guillermo was appointed CEO of the Sicav, he had spent ten years at Interdin where he served first in equity sales and then he joined the Analysis Department as the Analyst for the sectors of banks, airlines and paper. Studying banks as an analyst he found out the Austrian Economics approach. He began his professional career doing a rotational programme in Chase Manhattan Bank. In his early years he began managing family portfolios applying value-investing principles. He holds a Bachelor´s Degree in Law and Business Administration from the Universidad Pontificia Comillas (ICADE; E-3). His main hobbies are reading history and investment books, as well as biographies and playing tennis, swimming and skiing. He speaks Spanish, English and French.