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ДОМ.РФ: как все работает, будущие дивиденды, проблемы Самолёта и что ждёт строительный сектор — Transcript

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0:00This doesn't mean everything always
0:01goes according to plan.
0:02>> Can we say that our construction sector
0:04, judging by the latest reports and the
0:07market situation, has truly entered a
0:09crisis?
0:09>> Every fifth project, yes, will not
0:11repay the entire loan with interest.
0:13That's what we call a default in
0:15housing construction. If it's
0:16experiencing difficulties, then those
0:18difficulties are probably the fault of
0:20whoever lent it in the first place. And
0:21Tomref wasn't involved in this. This
0:23means the bank will receive the entire
0:25debt with interest, its entire margin,
0:27its entire profitability. The developer
0:28will receive zero. This is an
0:29unpleasant figure, of course, for the
0:31developer, but at the same time, it's
0:32pleasant for the bank, yes, just so we
0:33understand the situation. It's a unique
0:34business, really, if you look at it.
0:36>> And how is this better? Sberbank
0:37>> will have a day when they will ask
0:39other companies: "How is this better
0:41than Domrf?" Hello, friends! Lyonov
0:57with you. Today I have another company
0:59as my guest, Dorf. It is a state-owned
1:01company. Despite this, it is very open
1:03to communication with private investors
1:05. It has recently received several
1:06awards for this. Moreover, not many
1:08companies can boast of growing stock
1:10prices these days. And this combination
1:14of a dividend chip and a growing
1:16business allows us, in fact, to look
1:18very positively at Domrf. And my task
1:22today is to figure out whether there
1:24are any hidden aspects, whether there
1:26is anything we can be wary of, what
1:28negative scenarios even exist. But it
1:31is unlikely that everything should
1:33always be only good. An investor should
1:36consider the worst-case scenarios. And
1:38I will not be the only one figuring
1:40this out today. And with me here is
1:42Alexey Pudovkin, Managing Director and
1:44Member of the Management Board of PJSC
1:46Domrf. Alexey, hello.
1:48>> Good afternoon, Igor. I suggest we
1:50start with this. And since in I mostly
1:52communicate with private investors, and
1:54I'm struck by the thought that, on the
1:56one hand, they all have a very positive
1:58attitude toward Domref, well, probably
2:00in part because the stock price is
2:01performing very positively against the
2:03overall market. At the same time, it
2:05seems that many of them either don't
2:07fully understand the business, or don't
2:09understand it at all. And the most
2:11common opinion is that, well, Domref is
2:13the same kind of bank, say, like
2:15Sberbank, which just specializes purely
2:17in mortgages. I suggest, actually,
2:19starting with, uh, trying to explain in
2:21simple terms to a private investor the
2:23full range of functions that Domref
2:25actually does, that it's not just a
2:28bank. And go straight through the
2:30structure, starting right there with,
2:32probably, net interest income, where
2:34everything is simpler, where there are
2:36two main components. Well, on the one
2:38hand, these are loans to developers, on
2:40the other hand, these are actually
2:42mortgages to individuals. So, it turns
2:44out that you're approaching this story
2:46from both sides: you earn money and On
2:48developers, and on those who then buy
2:50from these developers.
2:51>> Well,
2:51>> how true is this?
2:53>> Yes, well, for starters, this is
2:54generally a normal story for any bank
2:56that deals with project financing, but
2:59here it turns out that with the
3:00question itself, we immediately went
3:02into the banking business. But let me
3:04still allow myself to go back to the
3:06beginning, to this fork in the road,
3:08and start with the fact that Dorf is
3:10not a bank, right? Well, PADMF is a
3:13financial company, uh, it's more of an
3:16infrastructure company, in fact, than a
3:18bank, because the house, the group, has
3:21about ten different business lines, yes
3:23, only one of which is banking. At the
3:27same time, the banking business
3:30provides, uh, about 60-65%, uh, well,
3:33you can profit, you can operate income.
3:36It's not very important here, you could
3:38say, well, the business, yes, 60-65%of
3:41the group's business. That's why in
3:44this regard, the banking business, the
3:46banking division of DomRF, is important
3:48, it is, uh, key, but the
3:50remarkableness of the investment case
3:52and the strength of the history of
3:54DomRF as Once in the non-banking
3:56business and in the combination of what
3:58this set of non-banking businesses,
4:00together with the bank, gives to the
4:02investor. I hope that's clear enough.
4:08>> I just want to start with the banking
4:10part, because it's more transparent and
4:12understandable, let's say, that is, yes
4:14, there are a lot of banks, when we
4:15analyzed it, that is, we can compare
4:17with something, and then take this
4:19second component, which will be more of
4:21a novelty for us. And so let's return
4:22to the banking part. You see the coin
4:24from two sides. On the one hand,
4:26companies are engaged, on the other
4:28hand, then individuals take out
4:29mortgages. To what extent is there some
4:31kind of connection, and is one
4:32indicator leading the other? That is,
4:36can you look into the future, based on
4:38one figure, and predict the second?
4:41Well, uh, if from the point of view of
4:43the overall business model, DomF is an
4:46absolutely unique story; you can't find
4:48another company whose business model
4:50would be the same. Because most of the
4:55non-banking business is unique,
4:57monopolistic, yes, in its Sort of the
4:59only replicable one, then in the
5:01banking part, we're doing the same
5:04business that other banks do, yes. In
5:09this regard, in terms of the banking
5:11business, yes, houses can be compared
5:14as a sector. And here, any bank that is
5:19engaged in housing financing also deals
5:21with mortgage lending, because these
5:23two businesses are very well combined.
5:29Indeed, this is due to the fact that,
5:31on the one hand, it is easier to
5:33correctly evaluate the financial models
5:35of housing construction projects,
5:37understanding the nature of demand, yes
5:39, the depth and all the trends. On the
5:46other hand, this is very complementary
5:48in terms of cash flows, because a bank
5:50that is good at issuing mortgage loans
5:53is more efficient in terms of sales
5:54management and filling, yes, the
5:56accounts of the developer, who is also
5:58always in this one bank that is being
6:01financed. Therefore, this is a kind of
6:06ecosystem story, where the retail
6:08corporate business is essentially one
6:10large chain of added value. And we, of
6:14course, see all this, analyze
6:16everything. And moreover, within the
6:19framework of the activities already
6:21PAODMRF, yes, there is a major think
6:23tank on the housing market in general.
6:27And here, too, we have certain
6:29synergies in terms of understanding all
6:31the trends. And I'll say more about the
6:35various legislative initiatives on how
6:37to further improve this market. And you
6:40don't have to look far for examples.
6:42This includes the reform of individual
6:44housing construction, the reform of
6:46multi-apartment building financing, and
6:49yes, the very same SCRO reform, which
6:51essentially created this huge segment
6:54of housing financing by banks in 1919.
6:56And before, let me remind you, housing
6:59was financed either at the developers '
7:01own expense or directly by individuals,
7:04right? And the addition of banks as
7:05intermediaries, as professional
7:07participants, was made possible
7:08precisely thanks to this reform. One of
7:11the authors of the ideological work,
7:13which was Dom RF, uh, as a group, is
7:15also mortgage securitization, which, as
7:18a business, was one of the largest
7:20businesses of the PO before MRF, but,
7:22on the other hand, is a continuation of
7:25this very chain of added value for
7:27everyone. Banks that issue mortgages,
7:32yes, because mortgages are complex, and
7:34the mortgage securitization business is
7:36very helpful to the banking business in
7:38mortgage lending. That's, uh, in a
7:42nutshell, the structure.
7:44>> Here I'd like to note, first of all,
7:46that, for individuals, the most
7:48important thing in accounting is
7:50probably their safety and security. So,
7:53a huge thank you in this regard. And
7:55also a huge thank you, yes, to the
7:57analytical center, because you provide
7:59a lot of open statistics. In general,
8:01if you look at all our leading media
8:04outlets that deal with either real
8:06estate or economic issues, you almost
8:08always see DomRF data among the sources
8:10of information. So, it really is a
8:12recognized open source, from which you
8:15can find a wealth of data. Therefore,
8:18if you own any shares or developer
8:20bonds, don't forget to check it out. I
8:23hope you'll find a lot of new and
8:24interesting figures there. Regarding
8:28the involvement of federal states in
8:30circulation, how important is this
8:32component and how...Can you explain in
8:34simple terms how DomRF makes money here
8:36, and what figures and values should
8:38you look at to understand how this area
8:40is developing? This is a
8:43>> very important area. It's historical
8:46for DomRF. We've been in this business
8:50for over 20 years. It's essentially a
8:54commission business, within which the
8:56DomRF team provides a whole range of
8:58important services. Yes, these services
9:06are again combined into this
9:08added-value chain, within which we make
9:10a plot of land, some property—maybe
9:13built a long time ago, recently built,
9:15abandoned, it doesn't matter, yes—but
9:18any real estate property that the
9:20Russian Federation has and which, for
9:22some reason, it isn't using, yes, it's
9:25not in demand. There could be many
9:33legal reasons, and from a property
9:35rights perspective, yes, there are many
9:37nuances in terms of the location of
9:39certain properties, in terms of
9:41integrity, yes, and issues of
9:43demarcation, connection, and the issue
9:45of communication. There are a lot of
9:49them, in fact, yes, we just don't see
9:52them in everyday life, yes, when it
9:54comes to suitability. A certain
9:56property or site, there are dozens of
9:58indicators where something could be
10:00wrong. So we take them all and bring
10:02them into full order. And after our
10:05work, the site can be sold. It becomes
10:08in demand, right? Investors emerge who
10:10are ready to buy it. Yes, in its
10:12previous status, no one wants it,
10:14because it is impossible, right, to do
10:16this work without the necessary
10:18competencies, experience, and knowledge
10:20. So we do all of this, find a buyer,
10:24and after they buy it, we receive our
10:26commission from them, right? And the
10:30entire amount, accordingly, goes to the
10:32budget of the so-called copyright
10:33holder, right, because on behalf of the
10:35Russian Federation there can be many
10:37different institutions, specifically
10:39who owns this site, yes, well,
10:41essentially, by and large, the budget
10:43goes to the state, and that's where
10:45they receive their commission. So here,
10:48well, our commission is inseparable
10:50from this added value. And only DOMRF
10:54has this set of competencies, know-how,
10:56and twenty years of experience in the
10:59country.
11:00>> I recently did this for myself. I
11:02bought a plot of land, and even there
11:03there were a ton of legal questions,
11:05about where the utilities are located,
11:06and so on, all sorts of encumbrances,
11:08land category restrictions. So I can
11:10imagine the horror that's going on here
11:12. How complicated is it? If we look at
11:16this business, could we say that
11:17there's a connection between the demand
11:19for these lands and future construction
11:22projects, in theory, right? So, could
11:25we also consider this as a leading
11:27indicator? There is certainly a
11:28connection. Uh, but within this
11:33business, we're probably not the number
11:35one supplier of land on which housing
11:37construction is taking place. We don't
11:42create the final database, yes, from
11:44which housing construction is then
11:46carried out. So, this is only part of
11:51the land stock on which the houses we
11:53see are subsequently built. Uh, that's
11:58on the one hand, but on the other hand,
12:00you're absolutely right that based on
12:02the dynamics and activity in this
12:04segment, we can draw some specific
12:06conclusions about the state of the
12:08sector as a whole, yes, and about
12:10interests, and about sentiment, uh...
12:13Land investors as, well, a first step
12:15toward housing construction. We work
12:17not only with federal lands, but also
12:19with plots of land and private ones.
12:22This is a new line of business, yes,
12:24it's not exactly successful there yet,
12:26but we can approach any private owner
12:28who owns, say, a shopping center like
12:30the one we're located in, and we can
12:32look at them and say, "Well,
12:34>> sorry, we need to find them an investor
12:37and sell them."
12:39>> If that helps, we can leave the whole
12:41land thing alone, basically.
12:44Accordingly, it's clear that you're
12:47helping various land properties acquire
12:49, so to speak, a clean legal status,
12:51and
12:52>> yes, you're giving them a path to life.
12:55But if we're talking about private
12:57properties, this relatively new line of
12:59business, how much demand is there for
13:01it now, and what prospects do you see
13:03for it? That is, can it really take a
13:06significant share and directly make a
13:08significant contribution, which we see
13:10in the honors? Historically, Domrof
13:14worked only with federal properties,
13:16yes, those belonging to the Russian
13:18Federation. And this activity is
13:21regulated by the relevant federal laws.
13:27We conduct it, uh, institutionally, but
13:30having the, uh, competencies, skills,
13:32we simply looked around and saw that
13:35this business line can provide the same
13:37set of added value to private
13:39individuals as well. That is, any legal
13:46entity, individual, any owner of any
13:49real estate, completed or unfinished,
13:51or just a plot of land, can come to us
13:54with this property with the desire to
13:56sell it to external investors. We will
14:00carry out exactly the same work, check
14:02it out, examine it, prepare it for
14:04auction, for investors, and find a
14:06buyer. In this regard, it turns out
14:09that this business line has two
14:11sub-divisions. We launched the private
14:17property division last year, and at the
14:19moment, I can't say there are any
14:21outstanding results in terms of profit,
14:24but we see that the flow of properties
14:26It's growing, yes, that is, the
14:28database is filling up. The pipeline—
14:34forgive the foreign wording, uh—yes,
14:36as a certain volume of future business,
14:39it's growing rapidly every month. We
14:44see an influx of potential sellers to
14:46us as an infrastructure that can
14:47provide this service. Therefore, here,
14:52of course, we expect that already by
14:54the end of this year, yes, in the
14:56overall structure of this business's
14:58profit, there will be a portion earned
15:00through working with private properties
15:02. Well, you've probably researched this
15:06market, and, that is, you understand,
15:08the overall market size, yes, and there
15:10are definitely some targets, and maybe
15:12not for the next year, but what share
15:14of this market do they plan to take,
15:17say, from Domref? That is, let's say,
15:19if these plans are achieved, relatively
15:21, if we compare them accordingly with
15:23the direction with the federal states,
15:26that is, how comparable these values
15:28will be, there it is conditionally, I
15:30don't know, 2-3%or something more
15:32significant. And in the long term, it
15:34could be something more significant.
15:36It's significant, since this is, in
15:38principle, a completely new service for
15:40the country. If previously, uh, like
15:45some investor in, say, shopping centers
15:48, yes, in order to buy or sell it, yes,
15:50they needed to somehow contact the
15:52owner or buyer, yes, now we offer the
15:55service of this centralized
15:56infrastructure for purchase and sale
15:59transactions. On the one hand, as if
16:04with this frequency, yes, on the other
16:06hand, in terms of infrastructure, that
16:08is, as a single platform that also
16:10improves the customer journey.
16:13Therefore, this is a completely new
16:15business. And I think that in the next
16:173-5 years, when the entire market
16:19adapts to this, we will see some
16:21significant figures. But at the same
16:24time, this is a business where we are
16:26very conservative in our valuation for
16:28the market, right? That is, we are
16:31doing everything possible to ensure the
16:33business line grows. This business line
16:35has very good characteristics in terms
16:40of costs, yes, the coefficient, well,
16:42cost increment, for example, yes, of
16:45the business line. And it is easy to
16:48scale, yes, and It's purely
16:49commission-based, meaning it doesn't
16:52require capital, and it doesn't have
16:54any additional complex regulations like
16:56banks, right? So, yes, it's easy to
16:59scale, so it's easily rolled out. The
17:01question here is, rather, about the
17:06formation of this market, but I repeat,
17:09in terms of positioning our financial
17:11model for both professional analysts
17:13and investors, we are always
17:14conservative. We propose to assume that
17:19a certain net profit figure for this
17:21line is constant or grows, for example,
17:24at the rate of inflation, right? So,
17:27we're not selling the explosive growth
17:29of this business line in our
17:30positioning. Let me put it this way.
17:32We're trying, we're working, but we're
17:34not selling the idea that the overall
17:36business of the Russian Federation will
17:38grow thanks to this. Just like we do,
17:39for example, with mortgage
17:41securitization, where we openly state
17:43that both our plans and our strategy—
17:45well, essentially, doubling this
17:47business by 2030, in line with the
17:49strategy, yes—or "business-project
17:51financing," where, Well, we expect
17:53growth by a factor of about one and a
17:55half, yes, where we directly show
17:57investors how, why, what figures we're
17:59aiming for, what targets—in this part
18:01, we're more likely to outline the
18:03potential and say that we'll work
18:05honestly, but we don't know whether
18:07we'll be able to significantly grow
18:09this business or not. If we do, there
18:11will be an upside. Here's the
18:13>> question: we're actually seeing a
18:15regular tightening of the screws from
18:17the Central Bank, yes, meaning they
18:19need to increase reserve requirements.
18:23And it seems that Domref, probably like
18:26other banks, should be looking—well,
18:28historically, you still want to compare
18:30it with banks, although that's not
18:32entirely correct—but looking more
18:34toward some new commission income,
18:36where you don't actually need capital
18:38for it to, well, grow infinitely,
18:40exponentially. So, what areas in the
18:45commission business, in your opinion,
18:47are the most interesting for DomRF's
18:49business in the coming years? But I'd
18:53like to point out that DOMRF has a
18:55consistently high share of non-banking
18:57commission business. It's not banking
19:01because it's not connected to the
19:02credit commission business
19:04traditionally done by banks. Yes, they
19:06sell some commission products along
19:08with the credit product, which, well,
19:10also logically goes hand in hand. We
19:12have such products, completely
19:14unrelated to credit, and therefore, to
19:17Central Bank regulation, leverage,
19:19capital adequacy—yes, independent
19:22commissions, monopolistic, in a sense,
19:24business lines. This is again the Land.
19:30What we just discussed is mortgage
19:32securitization, which provides a
19:33combination of insurance and commission
19:36income, right? That is, roughly half
19:40the tariff is insurance, half is purely
19:43commission, again, infrastructure, yes,
19:46for the platform we provide. And this
19:52is probably the main type of
19:53non-banking commission business, which
19:55very well complements the traditional
19:57banking commission business. In this
20:01regard, we cannot be compared, in a
20:03sense, with The banking sector, because
20:05there's no opportunity to work in these
20:07markets, right? We're the only ones
20:09with these markets. The scale of this
20:12business largely depends on us, on our
20:18work, yes, not so much on competition,
20:20yes, but on the quality of the product
20:23we provide. We touched on the fact that
20:26to a certain extent this is a kind of
20:28protection from the general situation
20:30there, yes, you could say, in the real
20:33estate market and in general, the more
20:35areas there are, if some of them are,
20:37say, independent, it allows us to
20:39navigate more smoothly through
20:40difficult moments. And so I'd like to
20:43move on to the risks, because it's
20:44clear that everything is fine now.
20:47After the presentation of the latest
20:49report, you even raised the guidelines,
20:51and everyone is expecting high
20:53dividends, which are now roughly
20:55comparable to the yield on OFZs. Well,
20:58unlike the latter, business there is
21:00also growing at a high rate of tens of
21:02percent. What could go wrong? The first
21:05thing I want to discuss is, um, well,
21:07after all, the company is state-owned,
21:10and, and we see, Uh, now the following
21:13points. Ah, we have the example of VTB,
21:15which took on some government
21:17obligations. We have the example of, uh
21:20, accordingly, the company Transneft,
21:22which became, well, not necessarily of
21:25its own free will, let's say, to put it
21:27mildly, the owner of a stake in
21:29Gazprombank. -uh, someone makes
21:32voluntary contributions to the budget,
21:35as if the state is, of course,
21:36interested in money and somewhere asks,
21:39uh, some companies to show initiative,
21:41to participate in social projects and
21:44so on. In fact, well, uh, DomRF here is
21:47also, if we can correctly call it,
21:50defenseless in this and can become a
21:52victim of the social burden, some
21:54additional budget, uh, expenses that
21:56will be passed on and so on. And to
21:59what extent is this really the case
22:01there and are there any, I don't know,
22:04restrictions there so that private
22:06investors simply don't suffer and don't
22:08see, instead of the expected return,
22:10say, figures that are half as much, but
22:13a ton of new, great social projects. A
22:15>> very multifaceted question. I would, if
22:20you allow me, I'd like to comment on
22:22what, well, at least, was reflected in
22:24my perception, yes, of the formulation
22:27of the question. Well, first of all, I,
22:33uh, like the logic of evaluating the
22:35dividend flow not at a point, yes, but
22:38in the long term, because comparing it
22:41to OFZF points, well, it seems to me,
22:43rather short-sighted. But if we look at
22:51some horizon, starting from two or
22:53three periods, yes, in this regard, the
22:55shares of a company that pay dividends,
22:58whose business is growing and net
23:00profit is growing, they are, of course,
23:02more interesting, because they,
23:04essentially, give you, uh, growing cash
23:07flow. Well, yes, a [ __ ] incom can't
23:10give you that, right? Here, there's a
23:13kind of growing cash flow and a
23:15potential downside from, uh, a possible
23:17revaluation, well, of investments in
23:20shares, or you could call it the body,
23:22the par value, yes, in the logic of the
23:25bond market. And there are, of course,
23:28risks that—yes, yes—the opposite.
23:34But if there's growing cash flow that
23:36stems from fundamental improvements
23:38that can be assessed, and companies
23:40that care about investors, about being
23:42understood by the market, provide
23:43enough information to assess this. Uh,
23:47this, I think, is a very strong point
23:50of this market, yes. Therefore, I, well
23:53, even welcome in some ways the posing
23:55of the question, uh, exactly this way.
23:58On the one hand, on the other hand,
24:00against fundamental improvements, yes,
24:02that's right, there are some risks. And
24:06if we talk about risks, yes, then,
24:08probably, the first part of the risks
24:10is related to the business, yes, and
24:13this is primarily a question of the
24:15model, yes. And here is precisely the
24:19high share of commission income, which
24:22...they are not subject to the credit
24:24cycle, yes, you also correctly noted;
24:26they are generally not connected in any
24:28way to the situation, uh, in the
24:30housing market, yes. They are
24:34independent business lines, where there
24:37is a client, a buyer; they live, well,
24:39in a sense, their own life. For example
24:44, mortgage securitization as a business
24:46for DOMRF is a function of the mortgage
24:49market. So, here I suggest simply
24:51looking at the statistics on how the
24:53mortgage market has grown, right?
24:56There's not a single year when the
24:58mortgage market hasn't grown. That is,
25:02we can see a year in which fewer
25:03mortgage loans were issued compared to
25:06the previous year, but the market
25:07volume is still growing. Yes, we're
25:10specifically interested in the market
25:11volume in terms of mortgage
25:13securitization. Of course, if more are
25:15issued, the market volume will grow
25:17even more. But again, yes, simply plot
25:21a graph by year, and you'll see that
25:24over 10 years, the mortgage market,
25:26mortgage loans on bank balance sheets,
25:29has grown from 5 to 25 trillion. This
25:32is a significant increase. And in
25:34general, mortgages are the largest
25:36banking segment. Deposits, the cost of
25:38housing itself. And
25:40>> yes, there are many factors at play
25:42here: the fundamental demand for
25:44improved housing conditions, rising
25:46costs, and the availability of credit.
25:49And our mortgage securitization, which
25:51is a business for us, and for the bank,
25:54it improves the balance sheet structure
25:56. By conducting mortgage securitization
25:59with us, paying us an insurance rate
26:01and a commission rate, the banks
26:03receive profits, and the capacity for
26:05new mortgage loans increases. And all
26:08this combined, yes, leads to the fact
26:10that this market volume as a potential
26:12base for our business is growing year
26:15on year. In this regard, yes, I'll go
26:20back a little bit to the risks. The
26:23financial model, the financial history,
26:25is a very important part of assessing
26:27growth prospects, yes, how and which
26:30business lines will this growth occur.
26:33This is one part, yes, it is, well, in
26:36my opinion, very important. And we, as
26:40DomRF, do everything possible to ensure
26:42investors have enough information to
26:44make the right, informed decisions. Yes
26:50, we try to, well, disclose, explain,
26:52and demonstrate as much as possible,
26:55from monthly IFRS reporting to an
26:57annual report specifically for retail
27:00investors. That is, we have a shortened
27:05mini-version of the annual report, a
27:07document typically hundreds of pages
27:09long, yes, but adapted for investors
27:12who, well, don't want to read 200 pages
27:14, but want 15. So. Uh, we have that in
27:16our arsenal. Therefore, we ensure that
27:20our investment story in this regard is
27:22understood and that investors can
27:24independently distinguish, uh, the
27:26DomRF business from, uh, a simple
27:28banking business, yes, or some of our
27:30colleagues in the financial sector,
27:32companies traded on the Moscow Exchange
27:35. And there is a huge aspect of
27:37corporate governance, yes, let's say,
27:40in a broad sense. Now I'm getting
27:43closer to your question regarding
27:48shareholder actions. First of all, I
27:52should probably start with the fact
27:55that DOMRF has a history. Yes, the
27:57company will be 30 years old next year.
27:59You can find IFRS financial statements
28:01for the past 20 years online. There
28:03were no such cases.
28:05>> Well, there was no broadcast either.
28:06The first was
28:07>> when taxes were raised significantly.
28:09Now, a few years later, the second one,
28:11before that, everything was fine too.
28:12That's
28:13>> on the one hand, yes. On the other hand
28:17, we have a number of requisites, like
28:19external audits, which we, as a company
28:21, are happy to undergo to make it
28:23easier for the market to evaluate us.
28:28For example, these are share ratings.
28:31That's the new initiative of the Bank
28:33of Russia on non-credit ratings. Half
28:36of the report is devoted to assessing
28:38the protection of minority shareholder
28:40rights. A crucial part. And here we, uh
28:44, strongly support the initiatives and
28:46actions of the Bank of Russia. Because
28:51a professional participant, such as a
28:53rating agency, which has a
28:54non-disclosure agreement (which, by law
28:57, is not allowed to disclose
28:58information), comes and checks
29:00everything: what decisions were made,
29:02how the company's management operates,
29:05how the company's supervisory board
29:07operates, and what decisions the
29:09shareholder promotes and makes, and
29:11then makes its overall judgment, yes,
29:13publicly, assigning a certain score. We
29:18have two such rating agencies, and both
29:20agencies have given the highest score.
29:23We'll outline the coordinate system now
29:25, and then, somehow, within it, it will
29:28probably be easier to answer this
29:30question. The third element of this
29:32coordinate system is the role of domrf
29:34in the stock market. Domrf is a company
29:37whose future is, well, largely tied to
29:40the stock market, yes. This is a
29:42shareholder decision in the broadest
29:44sense of the word. To achieve the
29:48possibility of IPRF, a change in the
29:50law was necessary, and this is a very
29:52serious procedure, yes, involving, well
29:55, a large number of people making
29:57decisions on behalf of the state. Yes,
30:01that's one process. We received that
30:04permission, right? On the other hand,
30:06it plays a major role in the national
30:08goal announced by the president to
30:10increase capitalization. Yes, here,
30:14domrf, well, the company was like an
30:17example, the first sign—we're talking
30:20about, you know, a simple definition—
30:22like a company that's going public. At
30:27the same time, because the company
30:29needs resources from the capital
30:30markets, and we needed this capital for
30:33growth, right? On the other hand, which
30:36takes on the challenge of being a
30:38public company, transparent, reporting,
30:40yes, and a kind of illustrative story,
30:43you could say.
30:44>> It would be strange if there were
30:46>> several factors here. You see, you're
30:50already approaching the answer to your
30:52own question. And here, within the
30:56framework of this broad consensus, a
30:59strategy emerged, and a system of
31:01strategy, yes, which envisions doubling
31:04the business from 2025, yes, and assets
31:06. Profitability above 20%. Every year,
31:11we must demonstrate profitability above
31:1320%. Paying out half the profit as
31:16dividends is also a shareholder
31:18consensus, adopted by the supervisory
31:20board. And a management incentive
31:23system tied to both achieving strategic
31:26goals and capitalization growth through
31:28share incentives. So, we have a
31:31complete connection, yes, from the main
31:33shareholder, the Russian Federation, as
31:35a shareholder, to the Russian
31:37Federation as a state, in which the
31:39stock market and housing sector must be
31:41developed simultaneously. So, we're
31:45solving two national goals, yes,
31:47because the capital we've raised will
31:49go toward developing the housing sector
31:51. And the very fact of our APO is the
31:54development of the stock market. All
31:56the way down to the management, who,
31:58well, having shares and a long-term
32:00subscription to the company's shares,
32:02well, of course, are interested in
32:04developing the company and ensuring
32:06that both assets and profits more than
32:09double over the strategic horizon, and
32:11that profitability is higher than 20%
32:13every year. You see, we're doing well,
32:15yes, both last year and this year are
32:18much better than 20%. Ah, and for the
32:20company's shares to rise. So how could
32:23something bad possibly arise in this
32:25system of coordinates? I'm not saying
32:27it's impossible, but it would be
32:29strange, yes, to claim that anything is
32:32impossible in this life. But you must
32:34admit, it's a good system of
32:35coordinates,
32:37>> not here, probably least of all the
32:39question is from the company's
32:41perspective, and it's unlikely that
32:43such ideas will originate from there.
32:46You just need to understand that, yes,
32:48the shareholder's job in the Russian
32:50market, in my opinion, is to foresee
32:52all the worst-case scenarios, as they
32:54say, prepare for the worst, hope for
32:56the best. That is, so that it at least
32:58doesn't come as a surprise to you, to
33:00factor in whether such a thing is even
33:01possible, how likely it is. I
33:03definitely don't think the risk is very
33:05high, but you need to understand that,
33:07in any case, yes, that is, this is an
33:09illustrative story. But if the question
33:11is, uh, financial—that, yes, we need
33:15to attract more funds from somewhere
33:17and so on—then it seems like we can
33:19turn a blind eye to certain things,
33:21like, this was a good illustrative
33:23story, but now there are more important
33:25things. Well, on the other hand, look:
33:28we are, uh, one of the largest dividend
33:31payers to the state, yes, and, well,
33:34that's also our contribution, yes. And
33:38minority shareholders received 246
33:40rubles this year, uh, almost 90 kopecks
33:43in excise tax, and the state also
33:45received some. And business growth,
33:48coupled with increased profitability,
33:50will lead to our guidelines saying that
33:53next year it will be 325 rubles per
33:54share. And a year later, well, let's
33:57multiply it conservatively, I don't
33:59know by how much—115, 1.2, how much
34:01—well, almost 400 rubles per share.
34:04This is a very good cash flow, yes,
34:06which is needed, including by the state
34:08as a financial resource. And they are
34:10counting on this, too. Well, I think
34:14this is a strong foundation, I would
34:16say, for maintaining this configuration
34:18and not disrupting it. And we make a
34:22very significant social contribution
34:23through the development of the housing
34:25sector. We, we, we do a lot both from a
34:27business perspective and from the
34:29perspective of our functions as a
34:31development institution. For example,
34:35investors often write about our
34:37dependence on preferential programs. So
34:41, taking this opportunity, yes, I want
34:43to say that no, we do not have a
34:45business dependence. Yes, Domrovka's
34:49function as an operator is to maintain
34:51a digital registry, we interact with
34:53banks, exchange information, and
34:55communicate the amount of payments
34:57under these programs to the Ministry of
34:59Finance, for each bank. That's the
35:03operator's function. Yes, the Ministry
35:05of Finance pays. We don't even touch
35:08this money. That's it. But we are
35:10literally an operator. Yes, we conduct
35:13information exchange. Yes, there is
35:16some, uh, cost involved, but this cost
35:18compensates us, meaning we don't make
35:20money on it. This is a huge social
35:23function, because, well, we conduct
35:26this entire information exchange with
35:28banks on, can you imagine, how many
35:30millions, uh, loans and trillions of
35:33rubles, fulfilling, well, a certain,
35:35again, kind of benevolent social
35:37function that allows the mortgage
35:39market to develop. We sort of bring it
35:43about in this area, uh, like this.
35:46Let's move from this external risk to,
35:48you might say, an internal one. This is
35:53precisely the data from the report that
35:55the total delinquency on loans is
35:57estimated at amortized cost at half the
36:00level at the end of 2025. The other
36:02metrics aren't as significant, but it's
36:04clear that there is still a certain
36:06deterioration in the loan portfolio.
36:10Total overdue loans have grown to 143
36:13billion euros, the bulk of which are in
36:15early baskets of up to 90 days. While
36:18this is one component, the cost of risk
36:21in 2025 was 1, and now it's 0.7. So,
36:24it's become noticeably lower. There's a
36:27concern, therefore, that given the
36:29slowdown in loan portfolio growth next
36:31year, in 2027, we'll have to return to
36:341, and perhaps even higher, which will
36:36eat into a huge portion of profits,
36:38reduce dividends for shareholders, and
36:41so on. So, how likely is this, and is
36:46there a plan for this? So, how do you
36:49balance it out? Why was the cost of
36:51risk lowered overall?
36:52>> There is a plan. And let me correct you
36:55a little. The cost of risk was actually
36:590.6. It could have been in a bank, yes,
37:01in the banking business. The bank also
37:05publishes reports, but since the
37:07banking business only includes housing
37:09finance and a little mortgages, the
37:11cost of risk structure for the overall
37:13business of PJSC DOMRF is different,
37:16right? About 65%of it is housing
37:21finance, and about 15%is operational
37:24risk, and other technical risks, yes,
37:27which, well, are definitely present. Oh
37:31, and mortgage risk is primarily
37:33already formed by the classified
37:35portfolio, which, well, as PJSC DOMRF
37:37is not a banking business, yes, it does
37:40not exist on the bank's balance sheet.
37:42Therefore, if we take only the bank,
37:43then there is only one cost risk, which
37:45is normal. But if we take into account
37:47the entire DOMRF business, we get 0607,
37:49which we have had consistently for the
37:51third year in a row. That's the first
37:52one. It is precisely due to
37:54>> this non-banking part that the decline
37:55is occurring. I wouldn't say there is a
37:57decline. No, there is a decline. There
37:59is no decline. And yet, the environment
38:02, well, it seems to me, doesn't allow
38:03us to talk about a reduction in the
38:05decline relative to the bank, that is,
38:07well, the indicator. That is, this is
38:10offset, yes, by, well,
38:11>> of course, because we see virtually no
38:14risk in mortgages. Yes, despite the
38:16fact that default rates have increased
38:18relative to themselves, they are so
38:20small, so insignificant and so
38:22manageable. Yes, and in general,
38:24mortgage loans are so secured that they
38:26have virtually no impact on the overall
38:28cost of the group. So. And housing
38:31financing, of course, has a most direct
38:34impact, right? That is, the main volume
38:36of risk and the main part of the cost
38:38of ri in the DOM RF group in general is
38:41the banking business, housing financing
38:43. Here I want to note that DOM RF has
38:45no interest rate risk, unlike other
38:47banks, right? This is another plus for
38:51our stable countercyclical model. Yes,
38:54and why is DOM not a bank? Yes, we have
38:56no interest rate risk, we have a very
38:58balanced asset and liability structure.
39:00And in many ways, again, thanks to the
39:02group's non-banking business. And
39:05there's no currency risk; we have a
39:06ruble balance sheet. That's why we
39:09don't have volatile cost-of-risk
39:11components. Yes, there is only credit,
39:14non-volatile. Yes, it's residential
39:17construction with a five-year cycle,
39:19and yes, it has a very long credit risk
39:21maturation process. It's very
39:23manageable in this regard, right? This
39:26isn't the case with corporate lending,
39:28especially if we take some, say, small
39:30and medium-sized companies, yes, which
39:33a year ago might have posted a good
39:35report, a year goes by, then a loss,
39:37and that's it. We don't have that kind
39:40of business, do we? We have a five-year
39:42cycle on average, so even if something
39:44doesn't go according to plan, we see it
39:46well in advance. We have time to build
39:48up reserves, we have time to take a
39:50number of measures to improve the
39:52situation together with the developer,
39:54yes, because by financing the project
39:55within our bank's closed loop, well, in
39:57a sense, we become a partner, yes,
39:59that's the whole project. And when we
40:01approve the financial model, we, uh,
40:04carefully examine and stress all the
40:06assumptions. Sales rates, sales volumes
40:12, sales prices—we understand right
40:14down to what projects will be built on
40:17neighboring streets, in the same area,
40:19yes, in the neighboring area, right
40:21down to such details, yes, there, uh,
40:24whether it's competitive in this price
40:26segment or not, better or worse by
40:28certain metrics, is the ceiling height
40:30higher here or lower, I don't know,
40:33more windows per meter or less. We
40:37analyze absolutely everything: the
40:39availability of infrastructure, the
40:41load on schools, kindergartens. Well,
40:44so that at some point it doesn't turn
40:46out that a wonderful project, yes,
40:48becomes not so wonderful because
40:50someone didn't calculate that there was
40:52a kindergarten in the area—I'm
40:54talking about it now, yes—that's
40:56impossible, yes. The level of detail of
40:59the analysis and the depth of immersion
41:01is incomparably higher than what I'm
41:02doing now.
41:04>> Now after this, you know, like in the
41:06comments about parking. Well, uh, let's
41:14do it this way. Uh, that doesn't mean
41:16everything always goes according to
41:18plan, right? I'm just saying it's a
41:21very responsible approach. It's not
41:23just reading the reports once a year or
41:24every six months and concluding that
41:26everything is fine. Yes, it's much
41:28deeper. A phased approach. That is,
41:30every ruble the bank issues, first of
41:33all, goes within the bank. It's
41:35monitored, it's targeted. Bank
41:36representatives visit the sites, they
41:39set up cameras. And if we issued a
41:41ruble for construction, for example,
41:42for pouring a foundation, and we arrive
41:45and there's no foundation, then a
41:46second ruble won't be issued. Yes, if
41:49the pace—usually the pace of
41:51construction roughly corresponds to the
41:53pace of sales. Yes, in years with very
41:55strong sales, construction was often
41:58faster. Now, when the sales pace is,
42:00well, obviously lower than in previous
42:02years, yes, and we're all currently
42:04living under a certain amount of stress
42:06in terms of declining sales, now, of
42:08course, it's more profitable and more
42:10correct to build, uh, a little longer.
42:12That's what developers do as our
42:14counterparties, yes, and from a risk
42:16standpoint. This is the right answer,
42:19yes, it increases resilience in
42:21response to the fact that demand per
42:23unit of time has decreased, right? So,
42:26what does that mean? You need to
42:27stretch out the number of units of time
42:29, so they coincide. At the same time,
42:32there's legal isolation from other
42:34projects, from the holding structure,
42:36from everything. Yes, for each
42:41individual building, the entire cash
42:43flow circulates within the bank, which
42:45finances all sales into an account
42:47within that same bank. And therefore,
42:51when a project is completed, the bank
42:53first pays off the debt to itself. Yes,
42:57I don't need to wait for the funds to
42:59be repaid. They're already with me at
43:03any given moment, yes, the repayment
43:05through sales is generated at my bank.
43:08It's a unique business, really, if you
43:10look into it. Exactly. Ah, but it also
43:13has risks, yes, because even an ideal
43:15model at some point in time, yes, due
43:18to various factors, can, well, for some
43:20reason, not go according to plan. And
43:24so it happens, as in any business, yes,
43:26there's management risk, this
43:28shareholder risk. The question is how
43:31to manage it. Here, well, firstly,
43:33there are many operational management
43:36levers, but from a strategic management
43:38perspective, this is, of course, a
43:40reserve, right? That is, we
43:43systematically create portfolio
43:45reserves for possible future risks. The
43:50Cost of 0.607 that you see isn't for
43:52specific projects that can't return
43:54something today, right? This is the
44:00formation of a proactive approach in
44:01case a certain number of projects can't
44:03return something tomorrow. That is, we
44:08are very disciplined in this regard,
44:10and we proceed from the following. How
44:12do you even arrive at Cost of 0.607? We
44:16analyzed the credit quality of
44:18developers before the SCRO reform. Yes,
44:22we saw a certain default rate, and we
44:24assumed that, based on the statistics
44:26that existed before 2018 in a weaker
44:28market, fundamentally, obviously, yes,
44:31because SCROW and the professional
44:33participant of the videobank, who
44:35analyze the financial model, added a
44:37lot of stability. Yes, before, a
44:42developer, well, they weren't analyzed
44:45by the bank before opening sales. They
44:48could decide for themselves, "This is a
44:50good location, a good project, and I'll
44:52start selling." Now, that's also
44:54impossible. The bank makes a
44:56significant contribution to the
44:58sustainability of each project. Yes, it
45:00has a material interest in this, and
45:02yes, it has a kind of institutional
45:04role. For this, it receives its margin,
45:07based on the fact that, let's say,
45:09every fifth project, yes, it won't
45:11repay the entire debt with interest.
45:13Yes, that is, in terms of construction,
45:16a default doesn't mean repaying the
45:18entire debt with interest, because,
45:20firstly, the building itself is pledged
45:22to the bank, and secondly, there's
45:24always some volume of SCW accounts.
45:27Total losses in project financing, well
45:30, that's impossible. Yes, there's
45:32always significant collateral, and in
45:34project financing, it's essentially
45:36double. This includes the building
45:38itself, which is constantly being built
45:40. Therefore, the bank is always
45:41interested in building the house and
45:43considering escrow as sales, which
45:45always protects the bank's financial
45:47stability. And this double collateral,
45:51it kind of systematically accumulates
45:53for the loan. Therefore, as a rule, in
45:58a completed house, even if it's 60 or
46:0070 percent sold, the bank still has the
46:03resources to repay the entire debt with
46:06interest, right? It's a question of
46:08time, right? Will it be very quickly or
46:10will it take a little longer? The bank
46:13doesn't get everything only if the
46:15total cash flow from all apartments
46:16sold is less than the debt with
46:18interest. This is what we call a
46:21default in housing construction, yes.
46:24Let's say there will be 20%of such
46:26projects. Yes, right now it's, uh, an
46:30order of magnitude less to understand,
46:33yes, and, let's say, for each project,
46:36uh, we will, uh, lose the same 20-25%.
46:42That's a lot, it's much more than the
46:45observed values, yes. Well, with this
46:53assumption, we only need to generate a
46:55cost of operation annually for this
46:57business line of approximately 1%,
46:59generating 5%of possible losses over
47:02the project's five-year life cycle. Yes
47:10. With such a strong, tenfold increase,
47:15yes, that is, this is not the basic, as
47:17I just described, that is, from the
47:20perspective of our risk management, the
47:22base and cost of risk, which you see in
47:25the reporting, is 0.7%of the group, yes
47:27, of which 1.0%is within the bank,
47:30within this business. It is—it is
47:32calculated for such inputs, well, with
47:35a reserve now, it covers what we see at
47:37the moment, and also gives us a certain
47:39confidence for the future. But again,
47:42seeing the market situation, we, of
47:45course, do not plan to reduce this
47:47level. We even plan to increase it if
47:49it allows for just net profit, because
47:51it is important to ensure the stability
47:53of the financial result. And a high
47:56level for us means a high cost of risk,
47:58which introduces possible stress. This
48:02is precisely for the investor and is
48:04very good in that it will help avoid
48:06volatility in financial results in the
48:08future. It means that the investor has
48:11already absorbed some of the possible
48:13future risks. And if they materialize,
48:15the investor will not notice them,
48:17right? And if they don't materialize,
48:20well, that's a positive factor. A
48:22>> decline, yes, that is, a certain
48:24dissolution of reserves, additional
48:26income. Of course, there's probably a
48:28certain panic right now in connection
48:31with a specific large developer on the
48:33market, yes, whose bond is drilled.
48:37Well, since it's quite large, well, so
48:40my question is probably less about
48:42DomRF, but rather as an expert in the
48:44field. Can we say that our construction
48:50sector, based on the latest reports and
48:52the market situation, has truly entered
48:55a crisis, or are these discussions and
48:57speculations a bit exaggerated and
48:59there's no serious situation yet? Well,
49:05first of all, the situation with the
49:08company you mentioned, which is
49:09well-known in the media, is unique, yes
49:12. There were a number of factors at
49:16play there, uh, which, in our view,
49:18aren't present in other cases. Yes,
49:20that is, it's a combination of
49:22circumstances, the decisions made, and
49:25the uniqueness of the case. Yes, that
49:27is, it's not a representative story for
49:29...
49:30>> well, it's just that several factors
49:32coincided simultaneously, like, even
49:34like, one or three days, which, taken
49:36together, don't exactly match up with
49:39the second case. That's one. Two. Well,
49:42sales are still declining. In this
49:46regard, of course, if we look at the
49:48industry, then, of course, a decline in
49:51sales is a negative factor. And, well,
49:54there's certainly more negativity in
49:56the industry now than there was several
49:58years ago. On the one hand. On the
50:00other hand, we see that for the third
50:02year in a row, the volume of receipts
50:05to Scraw hasn't decreased, 5 trillion
50:07rubles. Because prices are still rising
50:09, yes, and this compensates for the
50:11decline in unit sales. There's
50:13uncertainty regarding the scope of the
50:15preferential programs, right? We're
50:18currently waiting for a decision, I
50:20think it will be made soon. We'll see
50:22how this impacts demand. There's
50:24uncertainty regarding the pace of key
50:26rate reduction. But we see that the
50:30current level is already sufficient for
50:32market mortgage programs to revive. And
50:34we see that over 10%of sales in the
50:36first half of the year are already
50:38subsidized mortgages. A year ago, it
50:41was about 1%, two years ago, it was
50:43zero. In other words, structurally, the
50:45dependence on subsidized mortgage
50:46programs is significantly decreasing.
50:48The majority of sales, about half, are
50:51financed by own funds. Therefore, the
50:53sales structure is generally healthy,
50:55and it changes in line with changing
50:57macroeconomic conditions. That is, when
50:59there were very extensive subsidized
51:02programs, a very high rate, there were
51:04a lot of them—well, the share of
51:06subsidized sales could reach 90%, yes.
51:09Now, when rates are lower, market
51:11mortgages are larger, subsidized
51:12programs are being curtailed, and the
51:14rate cuts are also influencing people
51:16to pawn some of their funds on housing.
51:19We see a completely different structure
51:21, yes, in terms of the elements that
51:23ensure the influx of funds into escoro
51:25accounts and housing. Here are those
51:27same 5 trillion rubles, the same for
51:29three years in a row. Just to clarify,
51:32three years ago, 90%of that 5 trillion
51:35rubles was provided by preferential
51:37programs. Now, I think it'll only be 35
51:42%per year, right? 15%of that is market
51:46programs, 50%is self-purchasing. It's a
51:49very adaptive market, very vibrant.
51:52That's good, yes. Therefore, we believe
51:56that the trajectory of the key rate
51:57reduction and the parameters of the
51:59mortgage programs will be of great
52:01importance. On the one hand, yes, how
52:05about demand, the reaction of the
52:07construction sector to the decline in
52:09sales—well, what could it look like?
52:11It could take the form of slowing down
52:14new launches, yes, by managing exposure
52:16. Yes, that would be a reasonable
52:19response—yes, we need to put up
52:22slightly less, uh, yes, and build new
52:24ones, yes, concentrate on managing the
52:27current project until demand recovers.
52:30And as soon as demand picks up, yes, we
52:32can return to it. That is, this would
52:34be a certain, uh, well, reasonable
52:36response from market participants. We
52:38hope that this will be the case. We are
52:40waiting for it. That is why there is
52:42tension, of course. It is primarily
52:45related to, uh, demand. But the current
52:49, uh, SCOW portfolio account occupancy
52:52—it is in the green zone. It is
52:56slightly below 70%, but this is a good
52:59level, yes. At one time, it was 100,
53:02and 90, and 80—that was a super good
53:04level, but 65 is also a good level. For
53:08certain projects, yes, new ones, we can
53:14see, of course, a more dramatic
53:16situation, but they have only just
53:18begun their five-year lifespan, yes,
53:20they may be caught there just in time
53:23for demand growth. Therefore, it is
53:27impossible to summarize this in two
53:29figures, yes, and or simply say in one
53:31word whether everything is bad or
53:33everything is good, right? There's a
53:37whole range of metrics, a whole range
53:39of factors, large portfolios, and
53:41completely different corporate
53:43governance cases for the developers
53:45themselves, all of which collectively
53:47influence a certain sentiment. A lot
53:51depends on the regions, on the cities
53:53in which, yes, certain companies
53:55operate. There are cities where
53:58everything is very good, and others
53:59where it's not so good. It's also
54:02impossible to compare and say, well,
54:04that it's just this way or that way.
54:07But for the financing organization, for
54:09the bank, yes, the situation is, of
54:12course, well, to some extent better and
54:14more secure than, uh, for the developer
54:17, because, I repeat, the bank has an
54:19isolated project, yes, the bank fully
54:21manages the entire project, and the
54:24bank is the first to receive its funds,
54:26yes. According to the Bank of Russia's
54:35latest data, which we cited in our IFRS
54:376M presentation, the share of projects
54:39that have no safety margin, yes, but
54:42for which this indicator of future cash
54:44flow from sales versus principal and
54:46interest obligations, yes, is the main
54:49sustainability metric. If this
54:56indicator is equal to one, yes, that
54:59means the bank will receive the entire
55:01debt with interest, its entire margin,
55:03its entire profitability, and the
55:05developer will receive zero. This is an
55:08unpleasant indicator, of course, for
55:10the developer, but at the same time, it
55:11is pleasant for the bank. Yes, just so
55:14we understand the situation, it looks
55:16different depending on which side of
55:18the market you're on. Here's a
55:21situation in which the bank is very
55:23happy. And there are no delays. Well,
55:25that's only possible-only 0.5%. And
55:29another 6%of projects have this
55:31indicator of 1.5. So. Well, I can say
55:351.5 dash 1.10, but generally with a
55:37small margin. More than 90%of all
55:40projects in the country have a reserve
55:42of more than 10%. That is, they provide
55:44both a margin for the developer and a
55:46morsel for the bank. That's what big
55:47data looks like. These are good
55:49statistics, in my opinion, yes. But at
55:52the same time, the downward trend in
55:54demand hasn't stopped, yes, which
55:57suggests that, well, the future, uh,
55:59well, may be fraught with some risks.
56:03That's how I would try to describe it
56:05from all angles
56:06>> here, yes, that's what I'm talking
56:08about. On the one hand, if we go back
56:10in history, for example, yes, look at
56:12the example of the bank, how the
56:14Central Bank, you could say, purged the
56:16market of many small banks, and this
56:18ultimately turned out to be a positive
56:20—in the same way, perhaps the current
56:22problems there, the high key rate there
56:24, and so on, uh, would have purged the
56:27market of small developers. This could
56:29also have been a plus, yes, or for
56:31developers whose financial situation,
56:33well, was on the brink. And it's clear
56:36that, given the high social impact of
56:38the housing issue, there would
56:39definitely be people there, and their
56:41terms, people definitely wouldn't
56:43suffer, and everything would be okay.
56:48What's more important here is that we
56:51have a situation where, on the one hand
56:53, the overall temperature is rising,
56:55and the situation is becoming: the
56:57longer we have a high key rate—and
57:00the key rate, although it has dropped
57:02from 21, yes, to 14, it's still high—
57:04and this, uh, to a certain extent,
57:06can't be called unexpected, yes, but
57:09still, probably no one expected such a
57:11rapid development of events at the
57:13largest developer there. That is, uh,
57:19there is a fear that this will become a
57:21trigger that will simply destroy, which
57:23, uh, it's clear that, for example, the
57:26banks are unlikely to suffer, uh,
57:28because they will receive assets and
57:30complete the buildings. People, I think
57:34, are the least likely to be worried.
57:36They'll have their housing completed
57:38and will receive it, and at worst,
57:40they'll get their money back, but most
57:41likely, they'll get housing. Well, the
57:43social upheaval is too great. And then
57:45the question arises: who's going to pay
57:47for the housing? Because, well, if the
57:50developer goes bust, then either the
57:52private individuals who, um, bought it
57:54with bonds will be losing their money,
57:56and it's unlikely that it will be
57:58enough. So, who's going to pay? And
58:03won't the RF House become a social
58:04support system here, suddenly taking on
58:07another function? Well,
58:09>> why would it be?
58:11>> Who else?
58:11>> Why? Well, why? Who else? Look,
58:14>> the state has no money.
58:15>> Well, I guess, after all, uh, the
58:18situation is, we'll abstract ourselves
58:20slightly from project financing, yes,
58:22and try to, uh, carefully move on to
58:25the problem, based on the public data
58:27that exists, yes, that is, we have
58:30roughly the same knowledge there as you
58:32. I'll just, I guess, tell you how we
58:35see it. So, if we don't take on project
58:39debt, yes, then a company with
58:40corporate non-project debt, if it's
58:42experiencing difficulties, then those
58:45difficulties are probably the ones of
58:47the one who lent it to them in the
58:49first place. And TomF wasn't involved
58:52in that. That is, we didn't just lend
58:54money outside of the project logic.
58:56>> Well, you could say, the signing starts
58:59right away. It's clear who lent it.
59:00>> And there is someone who did. So, I
59:02guess the first question we should ask
59:04them is, or should we ask them, yes,
59:06the question is, what happens next? How
59:08will they resolve this situation?
59:09Because, well, it's their situation,
59:11you're right. The buildings will be
59:13completed because every bank that
59:15finances projects—there are many
59:16different banks, yes, well, it's a
59:18circle, you see, a developer, they have
59:20relationships with all the banks—
59:21every bank will ensure that every
59:23project is completed. And these are,
59:25well, these are very different aspects,
59:27yes, all the projects can be completed,
59:29and everyone will indeed get their
59:31apartments. Everyone will sort out
59:34their project debts; some will have
59:36more, yes, and accordingly, the surplus
59:38will go to the parent company to pay
59:40off the corporate debt. Some banks will
59:42have less, but they built up reserves,
59:44and they kind of set them aside a long
59:45time ago, yes. And overall, the
59:47situation with project financing is
59:49going well. As for the corporate debt
59:52issue, well, that's the lender's
59:54problem and the lender's own risk
59:56assessment. So, frankly speaking,
59:59although I initially didn't understand,
1:00:01well, what does this have to do with,
1:00:03uh, the Russian Federation, and why
1:00:05does the market even associate it with
1:00:08anything at all, besides the fact that,
1:00:10well, we work there? Although it is a
1:00:14financial instrument, it's a loan, yes,
1:00:16with which, uh, well, maybe something
1:00:19went wrong. So, it's a creditor's
1:00:21market. That's where investors should
1:00:24look, who are the creditors.
1:00:26>> Well, here it's simple, yes, that is,
1:00:28when we reason in this way, we
1:00:30essentially try to mix two separate
1:00:32components. That is, there are separate
1:00:36finances, which are specifically
1:00:38project financing and so on, and then
1:00:40there are finances, say, office,
1:00:43corporate, which were taken out.
1:00:45>> Well, there are other state-owned
1:00:47financial institutions that provided
1:00:49these loans. They are also state-owned.
1:00:51So, the Russian Federation House is
1:00:53also state-owned. Okay, yes. But why
1:00:55associate this situation with the
1:00:57Russian Federation House, and not with
1:00:59those who also lent it? They're the
1:01:02ones who should be interested in this
1:01:04situation being resolved. Well,
1:01:07moreover, the latest media articles
1:01:09seem to be talking about it in exactly
1:01:12the same way.
1:01:14>> I tried to paint a mini-apocalypse. I
1:01:16think I still didn't suffer. That's
1:01:19when I want to ask a slightly
1:01:21provocative question. It's become
1:01:25commonplace in our market—a
1:01:27collection, so to speak—to view any
1:01:29issuer through the prism of how it's
1:01:31better than Sberbank. And since the
1:01:36Domf IPO, I've been observing that for
1:01:39some reason, every time there's a
1:01:40direct comparison. They really don't
1:01:43like to compare multiples. Well,
1:01:45probably because the dividend yield is
1:01:47close, the multiples are close, and so
1:01:49on. So I want to ask you this
1:01:51provocative question: "How is this
1:01:53better than Sberbank?" There
1:01:54>> will be a day when they'll ask other
1:01:56companies: "How is this better than
1:01:58DomRF?" Well, that's both a joke and
1:02:03not a joke. Uh, of course, I suppose
1:02:06when you enter an established market,
1:02:08you have to prove yourself. Ah, and
1:02:12that's generally fair. We accept these
1:02:15rules of the game, so we're prepared
1:02:17for this question here, we agree. And
1:02:24in many ways, it's a good question,
1:02:26because, well, one of the best
1:02:28principals, if not the best, yes—
1:02:30given its public history, yes, again,
1:02:32ensuring minority shareholder rights,
1:02:35corporate governance transparency,
1:02:37dividend payments, profit growth rates,
1:02:40and share price growth rates themselves
1:02:42. Yes, but it's good when you're
1:02:47compared to the best, yes—we really
1:02:49like that. The comparison itself. So,
1:02:52one answer is needed here, as if by the
1:02:54Russian Federation's elected
1:02:56representatives.
1:02:58>> Friends, I propose we end on this
1:03:00positive note. You're probably used to
1:03:03me usually trying to find some obscure
1:03:05write-offs, strange figures. Well, alas
1:03:09, this is probably for those who wanted
1:03:11to hear something like that. And,
1:03:15fortunately, our market has acquired
1:03:17another issuer, uh, where things are
1:03:19really looking very good today, which
1:03:21is probably why I hold the company's
1:03:23shares. How relevant is this story to
1:03:28you? I hope this episode helps you
1:03:32clarify this issue. Thank you very much
1:03:35for your time.
1:03:36>> Thank you for your answers. That's it,
1:03:39bye everyone.

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