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MarketScreener Homepage  >  Equities  >  Moscow Micex - RTS  >  Sberbank of Russia    SBER   RU0009029540


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Russia's largest lender Sberbank expects AI profit expansion

11/20/2020 | 04:25am EST

* AI to add $788 mln to Sberbank's 2020 profit

* Sberbank targets using AI in nearly 100% of products

* Says AI-driven benefit to exceed $4.6 bln in next 3 years

* Studies experience of Google, Amazon

* Banking business to remain main profit driver for now

MOSCOW, Nov 20 (Reuters) - Artificial Intelligence (AI) will generate around 6% of targeted net profit for Sberbank this year as Russia's largest lender plans to put AI in charge of nearly all processes in its expanding product range, the bank's first deputy chairman said.

Sberbank, Russia's dominant lender, is going through one of the biggest reinventions in its 179-year history, banking on new IT technologies, cherry-picking the best solutions from global tech giants, and all the while extending its reach into consumer-focused areas.

Alexander Vedyakhin, who supervises the bank's AI Laboratory project as well as retail, corporate and investment businesses, said Sberbank was on track to make more than 60 billion roubles ($788 million) in extra income from using AI in 2020.

Sberbank, in which the Russian government owns a stake of 50% plus one share, had initially planned to make 1 trillion roubles in 2020 net profit but this plan was thwarted by the COVID-19 pandemic.

Having invested around 30 billion roubles in AI in 2020, Sberbank expects the AI-driven economic effect to top 350 billion roubles ($4.60 billion) in the next three years, Vedyakhin said.

It is not easy to distinguish AI-related investment from other money influx in information technologies but the assessment is that every 15 roubles spent on AI in internal banking processes generates around 100 roubles of additional income, Vedyakhin said.

Vedyakhin said AI is engaged in monitoring transactions within the bank's ecosystem, having helped Sberbank to reduce the time it takes to decide on providing a loan to just seven minutes.

"Now we have a range of 30% to 70% AI-based processes depending on the area: it is much higher in risk-management and still a little lower in front-office operations... Our aim is to have nearly 100% of products AI-based," he said.

Vedyakhin named Google and Amazon among companies that Sberbank, the former Soviet savings bank and now the biggest company in Russia by market value, is looking at for experience and solutions when implementing AI in house.

"Unfortunately there isn't another big bank making such a big transformation from a bank to an ecosystem and unfortunately we can't just copy and paste experience from outside. We have to cherry-pick the best from others and set an example ourselves," Vedyakhin said.

Sberbank's banking business will remain the key driver of profit for at least another three to five years, Vedyakhin said. ($1 = 76.1525 roubles) (Reporting by Andrey Ostroukh and Alexander Marrow Editing by Katya Golubkova and Elaine Hardcastle)

© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
ALPHABET INC. -0.19% 1727.62 Delayed Quote.-1.43%
AMAZON.COM, INC. -0.74% 3104.25 Delayed Quote.-4.69%
SBERBANK OF RUSSIA -2.62% 276.82 End-of-day quote.2.11%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) -0.09% 73.245 Delayed Quote.-0.66%
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Sales 2020 2 172 B 29 656 M 29 656 M
Net income 2020 705 B 9 628 M 9 628 M
Net Debt 2020 - - -
P/E ratio 2020 8,42x
Yield 2020 5,81%
Capitalization 5 949 B 80 871 M 81 215 M
Capi. / Sales 2020 2,74x
Capi. / Sales 2021 2,51x
Nbr of Employees 276 598
Free-Float 45,1%
Duration : Period :
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Mean consensus BUY
Number of Analysts 17
Average target price 328,96 RUB
Last Close Price 276,82 RUB
Spread / Highest target 68,5%
Spread / Average Target 18,8%
Spread / Lowest Target -19,4%
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Managers and Directors
Herman Gref Chief Executive Officer & Member-Supervisory Board
Anton Germanovich Siluanov Chairman-Supervisory Board
Alexandra Buriko Chief Financial Officer & Head-Finance
David Rafalovsky Chief Technology Officer & Executive VP
Sergei Mikhaylovich Ignatiev Deputy Chairman-Supervisory Board
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