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02.09.21

NSD Reports its Financial Performance Results for Q2 2021

Unless stated otherwise, all metrics are for Q2 2021 and changes in metrics are in comparison to Q2 2020.

  • NSD’s net profit increased 24.1% to RUB 1.68 billion under the Russian Accounting Standards (RAS);
  • the fee and commission income reached RUB 2.23 billion, showing the growth of 32.1%;
  • the value of assets in custody jumped 32.6% to the equivalent of RUB 69.5 trillion (as of 30 June 2021);
  • the total number of securities issues serviced by NSD increased 10.2% to 27.4 thousand (as of 30 June 2021);
  • the number of cash transfers reached 523.4 thousand, having increased 45.3%;
  • the liquidity offered by the Federal Treasury through repo trades, involving NSD’s Collateral Management System (CMS), amounted to RUB 8.4 trillion, a 6.3% increase year-on-year;
  • the number of trades reported to the Trade Repository soared 78.9% to 10.7 million.

Settlement and Custody Infrastructure

By the end of Q2 2020, the value of securities in custody at NSD reached RUB 69.5 trillion, a 32.6% increase against the similar period of 2020 (RUB 52.4 trillion). The number of securities issues (ISINs) serviced by NSD grew 10.2% to 27.4 thousand. The number of non-Russian securities issues and Russian Ministry of Finance’s Eurobonds reached 18.8 thousand (+11.3%).

The value of Federal Loan Bond (OFZ) balances reached RUB 15.2 trillion by the end of Q2 2021, which represents a 51% increase against Q2 2020.

The value of OFZ balances in foreign nominee accounts at the end of Q2 was RUB 2.9 trillion.

The number of OTC trades settled and cleared by NSD on a delivery versus payment (DVP) basis reached 133.8 thousand (+26%), while the value of such trades amounted to RUB 3.9 trillion.

17 commercial paper issues of 15 issuers with the total value of RUB 106.5 billion were registered. Also, in Q2, NSD registered two commercial paper programs of two issuers, valued, in aggregate, at RUB 210 billion.

The offering of 13 commercial paper issues valued, in aggregate, at RUB 48 billion was completed; 3 commercial paper issues valued, in aggregate, at RUB 0.12 billion were redeemed.

NSD was involved in the offering of two bond issues by the Moscow City Government for the total amount of RUB 105 billion. Moscow was the first region of the Russian Federation to issue bonds fully compliant with the ESG principles (the issuance took place in May).

In June, the Ministry of Finance of the Republic of Kazakhstan placed 4 bond issues for the total amount of RUB 40 billion.

With respect to Russian securities, 5,802 corporate action events were initiated, a 24.8% increase against 2020. With respect to non-Russian securities, 13,178 corporate action events were initiated, a 31.2% increase.

The E-voting service gets more popular, both among shareholders (the number of shareholders who voted through the service increased 104% against Q2 2020), and among issuers. The E-voting service was used by 15 issuers to hold 17 general meetings of shareholders (as compared to 7 issuers and 10 meetings in Q2 2020); of those issuers, four (RUSAL, Severstal, Inter RAO, and Tatneft) used the service for the first time. The E-voting service got more convenient to use by shareholders: it is now possible to register in the service and login into it using Sber ID, a single log-in solution to get access to services offered by Sberbank and its partners.

Trade Repository’s clients showed a significantly greater level of their trade activity. In Q2, 10.7 million trades were reported, a jump from 6 million in Q2 2020. The biggest growth was in the segment of repo trades (9.4 million versus 5.9 million). The number of forex swaps reported soared 2,921%, from 42.8 thousand to 1.3 million. The number of forex forward contracts reported decreased from 45.2 thousand to 42.7 thousand. The total value of trades reported to the Trade Repository in Q2 2021 amounted to RUB 125 trillion, as compared to RUB 124 trillion in the same period of 2020.

New Services and Customer Segments

The liquidity offered by the Federal Treasury through repo trades, involving NSD’s Collateral Management System (CMS), amounted to RUB 8.4 trillion in Q2 2021, a 6.3% increase against 2020. Floating-rate repos accounted for a significant share of that amount. The average maturity of Federal Treasury’s repos with NSD’s collateral management was 55 days.

In January, the Federal Treasury started offering its liquidity through the Single Treasury Account. The amount of transactions through NSD’s CMS reached RUB 8.8 trillion.

In May, the basket of mortgage-backed bonds issued by DOM.RF and available to be used in Federal Treasury’s repos was expanded to 17 issues. As of 30 June 2021, the amount offered through repos with mortgage-backed bonds was RUB 191.6 billion.

Bank of Russia’s repos with a maturity of one month and one year, offered to the market in 2020 as a measure to support the national economy, are still in demand. The instrument embeds a mechanism for intellectual selection of securities to be offered as collateral, depending on the maturity of the trade. In Q2, the liquidity offered by the Bank of Russia through one-month repos and one-year repos amounted to RUB 300 billion and RUB 1 billion, respectively.

In addition, NSD’s platform for Global Creditors’ liquidity management was made available to another Global Creditor, the Finance Committee of Leningrad Region. The liquidity offered by the new Global Creditor in Q2 2021 amounted to RUB 11 billion.

In June, NSD and the Finance Committee of Leningrad Region signed a Memorandum of Understanding for Digital Technology Development in the Field of Investment of Region’s Budget Surpluses. The MoU contributes to mutually beneficial cooperation in digital transformation.

Positive changes are seen in the development of financial marketplaces. As of 30 June 2021, financial products available through financial marketplaces were purchased by users from 34 Russian regions. All transactions are registered with NSD’s Registrar of Financial Transactions (RoFT). In Q2 2021, the RoFT registered transactions in bank deposits, bonds, UIT units, and OSAGO vehicle insurance policies.

Russia
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