Good morning and good afternoon, investors and shareholders. We welcome you to our conference call where we're going to discuss the results of the Sber Group for 2024. It is an important day for us. We disclosed the IFRS results, and we went back to our traditional format. We have provided you with the presentation, and the CEO and the Chairman of the Executive Board of SberBank, Mr. Herman Gref, and Taras Skvortsov, the head of our Finance Department, are with you today. We're going to have a Q&A session after the presentation. You have a QR code in the presentation to send a question to our platform. We have gathered these questions, and the questions that were upvoted most are going to be asked by me. This conference call is video recorded today, on the 27th of February, 2025.
There might be some forecasts and expectations that we're going to share with you that might not materialize in the future. Please look at our presentation for information. It is my pleasure to give the floor to Mr. Gref.
Investors, analysts, a very warm welcome. Today, we're summing up the performance of Sber Group in 2024. This is the first year of our new strategic cycle, our three-year strategy. As we said in December at our investor event, it was a challenging year for the entire market. We passed yet another test for our ability to dynamically change. Last year, the inflation was rising, and the unemployment was at a historical low, and this has led to fierce competition for talent and, obviously, rising wages. The key rate has risen to a 20-year high.
To combat high inflation, the regulator tightened lending conditions and increased requirements to the bank's capital. Yet, even in such conditions, we managed to achieve all the stated financial goals. The net profit for the full year reached RUB 1 trillion 580 billion. Earnings per ordinary share increased to RUB 72. Return on Equity stood at 24%. Our equity increased by 9% to reach RUB 7.2 trillion while making the record dividend payout of over RUB 750 billion for 2023. Half of that amount went to the federal budget. A very important thing to say is that we restored the group's total Capital Adequacy Ratio under Basel III to 20.0% and the N1.0 ratio to 13.3%. This indicator is the main criterion for determining the level of dividend payouts.
I'd like to say that that was the parameter that was the hardest to control and manage, but we were able to achieve all our goals for the previous year during the last year. So we would like to say that, basically, there were no parameters that were put for the top management team to achieve and that were not achieved. We have achieved all of them. Now, the comparison of the forecast with our actual financial results is displayed on the slide. We continue to increase the number of retail customers. Today, it's 109.9 million people, and we acquired almost 1.5 million new customers over the year. The number of monthly users of our SberBank Online and SberKids app grew by 2.2 million people. Today, there are over 85.5 million of them. The DAU/MAU indicator also increased to 54.1%. That's a record high level.
46.3 million people already use our app every day. Our transactional services are primarily the basis for high activity and frequency of use. We have various payment solutions: SberPay, QR, card payments. These give our customers flexibility in choosing the most convenient and most beneficial payment method. The MAU of SberPay at the end of the year approached 34 million users. We are actively developing the service for accepting payments through multi-QR. 1.8 million SberPOS terminals are available for this service. We are transferring this technology to other acquiring banks as well. We have 19 partner banks who can make purchases through our terminals, and leveraging our technologies, we have made a very important leap in the penetration of biometrics on the market. 1 million terminals already accept payments with a smile. We have cut the payment processing speed by half.
I'd like to remind you, by the way, that only one company in the world has a similar technology. Not in Russia nor in the world, no one was able to address the problem of using biometrics for payments, using a simple camera and a simple terminal with a 2D camera. The cost of the terminal went down to $60, lower than $60, actually, and that helped us to install one million terminals, and that was the results by the end of the year. More than 2.5 million customers used biometrics in 2024. The number of transactions over the year exceeded 25 million. The number of monthly users in December approached one million. This year, we plan to significantly increase the number of terminals so that these user-friendly and beneficial payments methods become available to even more customers.
Last year, I mean, obviously, we'd like to thank Apple, who introduced sanctions and disabled NFC. That helped us to develop the service, and that helps us. The service helps us to enter the metro stations with biometrics. It's a very reliable service. With any technology, this service needs some time to speed up, to take off. But running ahead in my expectations, I would like to say that we see pretty good dynamics. We are off to a strong start. In February, the growth, we had a twofold growth of the number of customers on a monthly basis. That happens as usually happens with the technology. People are starting to flock to it. Last year, the total volume of acquiring payments and transfers increased by 17% to almost 110 trillion RUB. The scale of Sber's transactional business requires impeccable reliability.
The efficiency of the fraud monitoring system reached 99.8%, which is the world's best, 100%, absolutely the best one. There's no other company in the world that can reach this level, especially if you think about the constant cyber attacks from a number of other countries. We show reliability, and we show that we protect our customers from the criminals. Last year, we managed to prevent fraud against our customers in the amount of more than RUB 300 billion. Last year, we rebooted our SberSpasibo loyalty program. Now, everyone can choose categories that match their personal preferences. As a result, the number of Spasibo program participants increased by 14.7 million people since the start of the year and reached 91.9 million users. During the year, our customers used over 193 billion bonus points, which basically means RUB 193 billion. So we saved RUB 300 billion.
That's, you know, these forecasts are pretty good. Last year, RUB 290 billion were stolen from the Russians by fraudsters, and the scale is just unthinkable. We saved RUB 300 billion for our customers. At the same time, we paid RUB 193 billion to our customers as bonus points. Just give this money away. Our SberPrime subscription has also changed. We have added new services to it, and we see a very positive response among the users. The number of SberPrime subscription users increased by 12.4 million people over the year and exceeded 22 million users. Our subscription is recognized as the most balanced and the most beneficial subscription on the market in terms of benefit service cost. As for the lending to retail customers, the portfolio increased by 12.7% over the year to RUB 18.1 trillion.
The share of Sber in the retail lending market is a record high, 47%. We have never achieved these huge market shares. The effect of mass-scale preferential mortgage programs in the first half of the year was the main driver of portfolio growth, and their completion and tightening of regulation significantly slowed the growth of the mortgages by the end of the year. The mortgage loan portfolio expanded by 9.6% and reached RUB 11.2 trillion. Our share in the mortgage market is 57%. The fastest growth was in the credit card segment, with Sber's portfolio growing since the start of the year by 43.4% to RUB 2.3 trillion. Today, our credit SberCard is used by 25 million people.
In 2024, the car loan portfolio grew actively, and this trend was observed throughout the market due to limited new vehicle supply in 2023 and an increase in recycling fee in 2024, so this year's dynamics is expected to be quite different from what we had before. The Sber's car loan portfolio grew by 83.2% over the year, exceeding RUB 600 billion. Sber's share in the car lending market grew three percentage points to 19.1% over the year. In terms of savings, high market rates stimulated the high savings activity among the population. Our lineup of deposits and savings accounts has been significantly transformed. We have new tools now that allow you to customize your deposit pricing based on the customer engagement. As a result, the funds due to retail individuals increased by 21.5% to reach RUB 27.8 trillion, and our market share stood at 42.3%.
As for our corporate clients, we managed to increase their number by over 150,000 clients to 3.3 million. Our online bank for businesses serves 2.9 million monthly active users. Of those, 51% use only our mobile app, Sber Business Online. That's its name. The share increased 2% over the year. Engagement is also growing. The mobile app DAU/MAU ratio grew 3 percentage points to 46% over the year, which is a very good indicator. Last year, we completed the migration of digital bank functionality for businesses to our target platform. We have launched a loyalty program for our corporate customers. It is used by over 650,000 companies. For most of the year, we saw a growing demand for financing with a clear slowdown closer to the end. The most active borrowers were companies from the following industries: metallurgy, oil and gas, and petrochemicals, transport, logistics, and housing construction.
The loan portfolio increased by 19% and reached RUB 27.7 trillion. A significant part is represented by the residential real estate financing portfolio. Over 64 million square meters of housing is being built throughout the country with the participation of Sber. I would like to mention the quality of this portfolio. The share of overdue debt is only 0.32%, and it actually even went down in Q4. We are restructuring our internal lending processes, and we bring new products to the market. For example, in 2024, we significantly increased the portfolio of gold loans for gold mining companies. This product showed a pretty good uptake among customers, and the portfolio grew several fold to RUB 200 billion. More than 90% of working capital lending solutions for large and medium-sized businesses have been transitioned to the digital lending process. That has enabled customized decisions and shorter decision-making time.
More than 90% of decisions. I would like to emphasize that the loan portfolio of small and medium businesses increased by 9% over the year to RUB 6.7 trillion. The funds due to entities increased 21.8% since the start of the year by 20% if we factor in the foreign currency revaluation, and they reached RUB 16.8 trillion. Sber's share in the corporate deposit market over this period increased by 1.3 percentage points and amounted to 19.8%. So this is not a target market for us. This is a kind of a balancing market. Among entrepreneurs, we see a demand for continuous self-growth and new knowledge and skills to help them. We've joined Sber University in launching new training programs. These programs are aimed at developing digital and soft skills, promoting personal growth and success at training.
Our AI-based digital technologies are widely used for social and economic development of Russia. Sber cooperates with 81 Russian regions in terms of AI development. Our AI solutions have already been implemented in healthcare utilities, as well as operations of various government agencies. We have a very wide range of solutions that we deliver to the regions, and I'd like to say that the governors are more and more happy with our AI-driven solutions, and they have more detailed and targeted demands for these solutions. In terms of the loan portfolio quality, trends in the corporate and retail portfolios went in different directions during the year. The level of non-performing loans in the corporate portfolio decreased by 10 basis points to 3.2% over the year. The cost of risk amounted to 0.45% over the year.
As for the retail portfolio, the level of non-performing loans increased, and that was expected during the year due to the unsecured lending segment, which can be explained by high interest rates, first of all, and tighter regulation. The share of retail non-performing loans went up by 1 percentage point to 4.3%, while the cost of risk for the year amounted to 1.75%. Overall, the total cost of risk for Sber's loan portfolio amounted to 1% over the year, which is slightly better than our forecast. So we thought it would be around 110-120 basis points. Efficiency. That's the issue that we prioritized last year, and we will prioritize this year as well. Our CIR, indicator cost-to-income ratio, was at the lower end of the forecast range, and it totaled 30.3%.
I don't even know what other bank can show such an indicator, given our scale and the scale of our chain of our brick-and-mortar branches. So we thought that that would be unattainable, but now it's a pretty banal figure for us, although, I mean, it is backed by our major efforts and total automation. The group's operating expenses grew by 15% over the year in the context of rising inflation and labor costs outpacing growth. Overall, wages growth in Russia amounted to 18.1%, while wages growth in the IT sector totaled 31.4%. Sber's payroll costs increased by 16.9%. I have to say that now it's much more prestigious to work in Sber. The image improved, and that helps us not only to compete wages-wise because the level of culture, the level of competencies and skill growth that our engineers get is becoming more and more important.
We train them, and we give them all the knowledge that we have accumulated, regardless of whether they are going to stay with us or go to the market. In this sense, we are not afraid of that because usually strong employees prefer to stay at Sber. Competition for the same employment offer is not that strong. The second major focus of our operating expenses is our investment in technologies and innovations, our IT. This area is of strategic importance for us. Of the tech breakthroughs last year, it is important to highlight the following. We migrated our bank card services to our proprietary processing system. It bears reminding that we've got over 200 million active bank cards, plastic cards. It's critically important. Not a single processing solution out there in the market can support us.
Traditionally, all of the Russian market used to sit on two proprietary solutions, and neither could really support us. Last year, we came second in the world after JPMorgan in the scale of the transactional business. We overtook all the other international systems, and on growth rates, we have good reason to suspect that we might actually come first in some point in the future. There's a very small gap between us and the number one, and creating our own processing solution, easily scalable, gave us a dramatically lower cost per transaction, and the speed and scalability is pretty much any that we want to. The peak workloads around the New Year season, we no longer fear those peak seasons, whether we clear it, whether we don't clear it. Those fears are past, behind us.
We accomplished a monumental project that we called L2P, Legacy to Platform, the transition to our own platform for all our big tech services. And that's not just independence from external vendors and not just high productivity. It's a lot of efficiencies. Our platform costs us 50% less than internationally available vendor-provided solutions. We straddled two platforms for a while. Those were additional costs. You asked us a lot of questions about those. Starting from this year, it's another life. L2P is over. We doffed all the legacy. We freed up over 5,000 engineers, and they will be switched to other programs, other development, another critically important program for us, AI native. That's the creation of a new technological landscape. Without this, we would have had to hire thousands and thousands of very expensive engineers. And here we are employing our well-trained engineers.
Thank you, engineering team that delivered on this transformational program. They are now switching to new, more ambitious tasks. And this is a major feat that we have celebrated. It is my great happiness that we actually delivered on time. It actually happened to come at the same time as a need to catch up with the AI transformation plans. On the old landscape, it was impossible to do the things that we aim to do on AI. Right now, we are one of the most, if not the most, prepared companies in Russia to make another major leap on AI. Last year, we accomplished major progress on GigaChat model family. Our model family is one of the strongest in the Russian markets. 7 million people use it. The total number of prompts exceeds 150 million. Sber is making a sizable contribution to scientific development, R&D.
We established an R&D center for AI last year. There's a small team, very tightly knit team of engineers that is developing a platform to assist the Russian R&D in their search of new breakthroughs. These years, 80% of new discoveries in science are made using AI, and we are looking to develop a dependable, good quality instrument for our scientists. This year, we will deliver on it. As AI is going to transition from an assistance role to the autonomous roles, new horizons for new efficiencies will be opened up. The good news for investors is that the recent success of DeepSeek made a revolution in efficiencies of models. Training models has become quicker and more efficient. I have to say that some of our solutions were used inside the DeepSeek landscape, and it gives us a reason to rejoice that we were able to study DeepSeek architecture.
We have to say that we are moving in very, very close landscapes with DeepSeek and with other major vendors. Of course, AI is creating new risks. The threshold for market entry is dramatically lower. That's new disruption, new competition. The failures will be for those who have not built up their processes and not made their processes flexible. We have been doing that, so we were not very much upset by the arrival of DeepSeek because we made GigaChat available to the market at large. It is as available to the market as it is available to us. It is available to our competitors, our partners alike. In this sense, we are not closing up. It is a means to use our own initiatives, our own innovative solutions, to use competition and drive ourselves.
We think we stand to win in this competition because we are the best prepared, not because we are able to lock those innovations inside Sber. We have been actively implementing AI agents, multi-agent systems. Obviously, this is not the format to talk with investors about AI agents, but multi-agent systems are definitely something that will radically change the business. This is something that you had not been able to imagine even a couple of years ago. As you work with customers, with clients, an employee will be able to field a very complicated question that a call center operator will take about 12 minutes on average to handle, and this is actual performance of our salespeople. In working with entities, an AI agent can look for tenders and proactively inform a relationship manager about those potential opportunities for financing.
This is a solution that was developed by a tightly knit team of our engineers that were actually working in their free time, and this kind of innovation is something that attracts new clients big time. We have been implementing AI agents for relationship managers in the co-pilot mode. GigaGen is another development, quite on a par with international opposite numbers. Actually, I was riding in my car to this meeting, and our engineers sent this thing up to me. Our agents were talking to each other, AI agents. After every single action, they were very polite. They were asking for forgiveness. They were making all kinds of polite statements, and I complimented the engineers. You were good parents. You gave very good upbringing to your AI agents, but this is an amazing transformation, AI transformation that we are going through.
Perhaps this is the most interesting period in the entire period that I've been working at Sber and perhaps in my entire life. Everything is changing radically. And we're actually happy that despite the adversity, despite the criticisms, we have been investing heavily into these technologies in all the previous years, and we are gaining all kinds of recruitments. We are seeing the happiness in the faces of our employees. We understand that we hit 100% bull's eye on transitioning to the human-centric philosophy. And technologies are actually becoming really, really mature at the speed that we had never envisioned. I think we actually guessed right on the right side of our endeavors. We entered 2025 in very good shape. The economy gained an additional impetus from fiscal spending. We improved our projection for the GDP growth in 2022 to 1.5%-2%.
At the same time, inflation will remain elevated yet. We have revised our forecast upwards to a range of 7.5%-8.5%. But we believe the key rate reduction cycle will start in the second half of 2025. We broadly agree with the Central Bank on that. In the second half, inflation was a bit too elevated. You can't really project the full year figures based on that. If the portfolios grow as they were, the portfolios had been a bit shrinking for two months. But for the full year, we expect a dramatic decrease of inflation if all things hold. We believe that the key rate reduction cycle will start in the second half of 2025. All the projections we maintain at the same time.
2025 is a very important year for the transformation of our business model, making our business an assistance for every single client of ours, expand the space of choice. We want to help every single person expand on his or her potential. The generative AI is the thing to use. That's the thing that creates these opportunities. Even in our case, this is not largely the technological transformation. It is the internal transformation for every single person inside our big team. And this year is what we're going to be focusing on. When we approved our strategy, dear investors, at the end of 2023, we thought that three years we will just spend preparing our technology. We see our technology developing at a much quicker pace than we had envisaged. And I have no doubt that by the end of 2024, we will be prepared to make this new leap.
But the main problem is our internal human unpreparedness for this most powerful transformation that we had envisaged. So this year will be a year of personal transformation for the bank, for the entire team, because there'll be a lot of rethinking to be done. Pretty much every single molecule of everything that we have been doing in the previous years will have to be transformed. The thinking modes, the algorithms of thinking, all of that will have to be revised. And if in the previous transformations, we were set in motion by our engineers, our specialists, and we were really decelerators with our classical ideas of the business models, this year, the engineers are an impediment as well. Because as they introduce the modern AI systems, you need to depart from the algorithms of thinking. And this is something that is achieved with great difficulty.
There's not a single person in the company, starting with me, that has no need to accomplish this transformation, of a most heavy kind, of a mental kind, the rethinking, the reappraisal of everything that we have been doing. This is a big path, a very complicated path, but we are initiators of the change. We must be open to the new things. We must be able to learn critically important skills these days. And I would like to thank every single employee of Sber for the performance last year, for the engagement, for the general willingness to pursue this change. We have no shame for our performance. They're very natural figures that we are citing. They are stable. They are long-term. They are sustainable. The company is in great shape, mentally and financially. Last year, we accomplished an increasingly monumental transformation.
We thought it's going to be a little effort. We created two business blocks, IT and technological development. Tech development is only wrapping its head around AI, the creation of the super modern AI-native landscape. AI-based organization, autonomous AI-based organization is something that we are aiming for. There's no benchmarks for that. But this is, again, dramatically hugely interesting. We think that we are embarking on an untrodden path, and we understand very well the answer to the question of Google CEO. He was asked the question, "What will be your major investments in AI? What is your projection for next year?" The projection for next year, what's his response? "Will be significantly more investment in AI." How about the recruitment? Not this year, not next year. We will not recoup this investment, neither next year or the year after that.
But we have this feeling that unless we invest, we will lose much more than just the money that we spend. And I can sign my name under every single word of this statement. Our investment into GenAI is non-recoupable so far, but the investment into the classical AI is well-recouped. And this is what gives us the room for maneuver. This is what gives us the room for investing in multimodal systems into GenAI. The classical business objectives are resolved with classical AI. Unless we transition to big tech, to AI platform, we would not have been able to embark on the transformation that we are embarking upon today. And the second word of thanks I would like to address to all the clients of Sber for sticking with us, for trusting us.
Thirdly, I would like to thank in a big way our shareholders and investors for their faith in us. Thank you very much. With this, I would like to take the questions.
Thank you, Mr. Gref. We are passing over to the Q&A. You have the QR code in front of you. We are waiting for your questions in the chat, in the chat room. Let's take the question from Dmitry Donetsky, Solid. You have the floor now.
Yes. Good morning, Mr. Gref. Congratulations on the accomplishing of this challenging year, you and your team. As a shareholder, I find it very important that you delivered not just on the forecast. You actually exceeded the forecast. So the question is, we have seen a certain fall in the relations with the United States. There's some talk about lifting of certain sanctions.
Do you think sanctions will be lifted from Sber? What is your expectation? And what potentially may be the growth points once that happens? Thank you.
Well, thank you very much for the warmth of your statement. It's very important for us. I'm not being formal here. We feel the great responsibility towards our shareholders and our clients. We went through this dramatic shock, and this really sharpened our sense of responsibility. In 2022, we were able to pay out 750 billion RUB of dividends in 2022. And that's obviously the result of our trepidation, really, and the sense of responsibility that we have for our customers. We have been going through transformation continuously for many years. But in these challenging times and challenging years, companies like us have to become the backbone of the economies. If not us, who will make that leap forward? What might happen?
Will that happen? Everything might happen. Our scenario is no sanctions will be lifted. And our scenario basically says that the sanctions will be even harsher. So if sanctions will not be harsher, I mean, it's impossible to make them stricter, really, because I think we are living under all sanctions possible. I talked with the ambassador of one of the countries, and he told me, "Yeah, come to visit our country." And I said, "Well, then lift the sanctions, and then we will talk." And he says, "Well, you are not under sanctions in our country." And I was like, "Wow, I thought that I was sanctioned in every country." Like a couple of countries, the entire world implemented sanctions against us and against me. Because I said, "Guys, I just stopped to count the sanctions, really." Because before, we were counting every sanction and thinking about that.
But now we see all this lunatics that are implementing some weird sanctions, some Xbox import sanctions. Like, what the hell is that, really? I mean, we will make our own Xbox. I mean, we can do anything. Microelectronics is the only thing where we struggle a little bit. But as for everything else, it only gives us the push, the boost to grow. So we're preparing for the worst. I mean, the financial market, we see a lot of foreign capital on the market, and it's increasing, obviously. The costs will go down if we're talking about this removal of the sanctions. We've created a special unit that works with the settlements when we understood what will be the end result of all of that. Basically, we were able to close all the demands for our customers.
And the international payments last year, we basically went back to our previous figures. We went back to the international cross-border payment market. There will be major changes, might be major positive changes, but our paradigm is to prepare for the worst. Thank you very much for your question, Dmitry.
Thank you. Next question is Mikhail Ganelin. Please, you have the floor. Mikhail, please. Mikhail, I think your mic is off.
Yeah. Hi, everyone. Thank you very much for what you do and your team does. It's absolutely fantastic. I have this strategic question. In the comments of the Central Bank, we see that the Central Bank wants to strengthen the capital adequacy ratio. The weights and the norms will grow. The capital adequacy ratios will grow. The add-ons will grow as well. Do you expect major investments in the next several years? And third, dividends.
The shareholders are accustomed to the fact that the bank pays good dividends in the next two, three years. Will it be possible to combine all these three factors? Will you be able to maintain the dividend payout at the same level? Or maybe you will have to shift some of the money to some of the funds to strengthen the capital adequacy. Thank you.
Thank you very much, Mikhail, for the question. When we changed the membership of the supervisory board, we had some tensions with the new members of the supervisory board. We were suspected. It was suspected that we are trying to do something to not pay high dividends, and I just said, "Ladies and gentlemen, just live in the company, work in the company for like six months, and then make all these conclusions." Because for us, this really is offensive.
This is an insult because our philosophy of life is different. Our concept is different. Paying all the taxes is not just a requirement. It's a no-no, and for us, paying our dividends is a part of our mission. This is basically the reason why we're here, so we will do everything to make sure that we meet all our obligations, all our requirements, so that no one can say that we saved something here and there. Mikhail, I cannot guarantee you that in the next two, three years, we will pay out all the dividends because the world is just so volatile, so under promise and over delivery, this is my motto, so it would be responsible for me to give you all these promises. It would be responsible for me to do that in front of my team, too. We'll try to make sure. We will make sure.
We will commit to deliver on all of these goals. We are going to pay all the taxes for Russia, starting from Moscow and going down to all other regions of Russia. We are the largest taxpayer. And we understand how difficult life might be in other regions of Russia. We will do everything we can to top up the federal budgets as well as regional ones. We understand that people were buying our shares, hoping that we will show stable results and that we will be really maniacs in delivering on our commitments. And we will do our utmost to deliver. I'm not saying that I'm not presuming that if we pay out the dividends, all the dividends, we might have challenges with our investments. We cut the costs and unnecessary costs, and we filter the unnecessary things. But there is always an efficiency margin.
We have a lot of things to remove still. Like in Toyota Production System, there is this word, the kind of a waste. They have this notion that you can remove the waste, and we are going to remove some inefficient costs, and we're going to pay for everything from our budgets, and the last one to be hurt will be our shareholders when we will say, "Sorry, guys, we are not able to pay the dividends." But I do hope that you will not hear these words from us.
Thank you.
Dividends is one of the most upvoted questions that we received from our platform, and there was a question. One largest bank said that in 2024, they will not pay out dividends, and what are we to expect? The largest bank is us, another largest bank, and one of the largest banks.
Oh, I thought that everyone, I thought that someone said such a silly thing about us. I will reiterate. I cannot guarantee you what will happen in the next three years because I really don't know what will happen, but we are going to pay all the dividends for 2024. In 2025, 13.3% Capital Adequacy Ratio is going to be met, was met, so we're going to pay out all the dividends. We don't have no excuses.
Next question, Olga Naydenova from Sinara. Please, you have the floor.
Ladies and gentlemen, Mr. Gref, thank you very much for the opportunity to ask a question. Now, you have mentioned that the sanctions might be eased and it might have some positive effects. What are the risks related to that? Because you have mentioned some huge investments in technologies.
Do you see any risks if we have new players that have access to international technologies? Are these risks significant for you in this point in time? The next question is about your management strategy for the assets, the non-financial assets that you have. Given the fantastic banking business result, the non-banking business assets are not delivering as expected. Can you expand on that, please?
Well, first of all, Olga, thank you very much for your question. Well, first of all, this is the result of not only the banking business and the result of the group and the result of our investments in different businesses. And we have very surprising synergies that are delivered by our diverse investment streams. Who would have thought that we are going to address engineering challenges by building huge data centers? And this experience would serve us well in building driverless cars.
I'm not going to expand into that, but the experience was reused, and that was absolutely fantastic. That's one example. The second thing I want to say here is that, obviously, today, when we make decisions, we are moving and fully transitioning to using generative AI in risks. The models are just delivering much better indicators. We're implementing GigaChat everywhere, and we are experiencing a great leap forward. Just one example. I don't think it's a secret, really. I think I can share this information, so you can see that Waymo company is now working in the driverless taxi market in three cities in the USA. That problem was thought to be unresolvable, and we are moving to GigaChat right now, and we're moving to generative models. In generative models, in three months, made such a progress that we were not able to achieve in the last five years.
Obviously, I'd like to underline that obviously, not all of our investments hit the target. Obviously, we made mistakes. We have a major advantage in terms of the scale and diversification of our investments. Are we concerned by competitors with international technologies? We are concerned, maybe only if Elon Musk comes with all these companies from Mars. I do not see any competitor, any company on planet Earth that would be able to challenge us. Really, among the banking structures, I don't see any competitors that would be on par with us, especially on the Russian market. Welcome. We will be very happy if we have an even harsher competition. I would like to say that other banks are pretty good competitors. Not all of them, obviously, but there are some very strong competitors or also partners. We respect them very much.
And we actually borrow some of their ideas. We learn looking at them. We don't think it's a problem, really. A very small bank might be the smartest one, and they can deliver great results. So you have to look at the competitors and to get their experience and to leverage that. So we're not afraid of anyone. If European banks wake up finally and come to our markets, I mean, come on. No bank is ready for such a level of technology implementation that we are going through right now. We are already doing that technology transformation. And I was quite modest saying that, by the way, but I'm pretty confident in what I'm talking about. The competition from the technology companies, yes, these are much more dangerous competitors for us in all areas except for banking. And here I'm talking about Russian technology companies. Good, powerful, great companies.
That goes for the international tech companies as well. If they all come to the Russian market, and especially the most advanced ones will come to the Russian market, that will drive the competition and drive up the risks. But we have not used all of our reserves. We will have to go to the top gear and really drive our bank forward. The harsher the competition, the more exciting it is.
Thank you very much. Anatoliy Panov from Smart-Lab.
Hello. Thank you very much for the opportunity to ask a question. I have the question about non-banking business. There are some major losses there. Maybe there is some timeline where it will break even, at least. And there was some information about cutting some of the employees that would help to mitigate the losses from the non-banking businesses.
Here we're talking about investing in the loyalty of our customers. On the whole, you are right. This year, we have much higher requirements for our subsidiary companies and for all of the companies that work with us, even the companies where we do not control the full stake. But we put very harsh requirements and goals and ambitious goals for ourselves. And all of these goals and requirements are going to be translated to all of these subsidiary companies. We are reviewing our management strategies for subsidiary companies. We have replaced many top managers in many companies, and we're going to continue that replacement this year as well. We have very high ambitions here. And we are looking for returns opportunities in these companies because the harsher the conditions and environment is, the more competitive they should be.
I mean, this year, they will not go; they will not break even. They will not deliver returns. I mean, each of these companies will not deliver the profits. But we are making great leaps forward to improve the situation.
Thank you very much, Andrey Sharov from Broker Company .
Mr. Gref, hello. Thank you very much for the presentation. I congratulate you on achieving all the goals. Another question about the capital. According to the dividend policy, the major condition on paying out dividends is to ensure the 13.3% of the capital ratio. And that also includes an anti-cyclical add-on, which from 1st February will be 0.25%, and from the 1st of June, it will be 0.5%, the additional add-on. Will the bank increase the capital adequacy ratio due to these changes? And what do you expect in midterm? Thank you.
13.3% is a level that we had. It implied an increase of several macro add-ons, including the anti-cyclical add-on on the part of the Central Bank. We had huge discussions at the supervisory board meetings. There was a session. There was a major division of opinion. The decision was taken, and everyone thought that the anti-cyclical add-ons are overkill. Look at the things in the banking system. Central Bank is giving leniency. But again, it panned out that strategically we were right. We set it up at 13.3% as the internal challenge for ourselves, and we have not seen any grounds so far for any increase over the midterm to lead to any breach on our part, any breach for our commitment on dividends. I'm not sure that the Central Bank is going to maintain the rate that they are aiming for.
I do apologize, but if they do, a lot of the banks on the market might go under, and sending too many banks onwards, taking them off the field, that's not too realistic. If that happens, if it does happen, then in 2028, our adequacy will be 12%, and it will be quite acceptable. If that happens, if the rate is maintained, we might raise the adequacy bar by 2028, but that's not very topical at this point. It is certainly not any reason for us to fail with those dividend commitments. Andrey, thank you very much for your question. We're passing over to the next block of questions. Our journalists are on the call as well. They also want to ask their questions.
The first question we will take from TASS, Anastasia Romanova.
Good morning. Can you hear me? I cannot hear anyone.
Anastasia, we are able to hear you. Please go ahead. But your mic is off.
Right. Right. Okay. All right. If I may, I've got two questions. One, the profit of the banking sector, according to CBR forecasts, might be RUB 2 trillion. Do you think it is possible given the current dynamics on lending?
Well, it is a projection that is lower than the previous year. Unless something follows a very bright scenario, the profit will be lower. 2025 is going to be very challenging for the banking sector. And for us, drafting the business plan was pretty uphill, let's put it bluntly. You're not to expect any super performance by the banking sector this year. If things happen steady as they go, it will be pretty negative for the lending.
I think starting from the second half, there might be a lowering for the key rate by the CBR unless something happens out of line. But this is our expectation. Moreover, we are looking at bringing the mortgage rates down. We made a first incremental step to bring down the commercial price on the mortgage loans. That's a meaningful story. A very, very small step to bring down the deposit rates and to bring down the loan rates. We are really groping for this threshold. We are probably one of the first banks that made this step. We are expecting a downward cycle. Thank you very much for the question.
Yes, Anastasia, thank you. We have another question from Anastasia Savelyeva , Interfax. Yes, Anastasia, go ahead.
Yes, good morning. Can you hear us?
Yes.
My question is, why did you provision that much in the fourth quarter on the corporate portfolio? Is that a single loan company or is that several industries? Perhaps there was a coal mining as well. And are you expecting any worsening on this sector? What is your take on the corporate sector in general? Would you expect an increase on the risk for that portfolio, perhaps due to the increasing rates, steadily high rates for the entire market?
Well, obviously, yes. The answer to your question is obviously yes. The proactive provisioning for core portfolio, for the core entity, yes. That's what we have been expecting, yes. And we were always conservative with respect to potential macro risks.
And the fact that we provisioned more in December, that does not mean that we encountered worsening of the portfolio, but we have proactively started to increase the provisions with the expectation of worsening situation. If the situation proves to be better, we will unwind the provisions. But if the situation pans out to be worse, then we had expected we'll be ready for that. All these circumstances are such and such. This is not something that we quote when we bring down the dividends because we don't bring down the dividends. And we expect our strategy to prove right another time. Thank you very much, Anastasia.
We have been working for pretty much one hour and 15 minutes. We've got time left for one closing question.
Yes. Hello, everyone. Hopefully, I am well audible. My question to Mr. Gref and Taras Skvortsov.
What is your take on the current situation with the mandatory liquidity? As we speak, there's a meeting of the head of the Central Bank with major bank representatives. Perhaps not major banks. You're not present there. Ms. Nabiullina has said that there will be no leniency on short-term liquidity from the part of CBR. We have seen the competition for liquidity turn into a competition for deposits of natural individuals, natural persons. That's an interesting situation, isn't it? Would you be looking to increase your share of the deposit market that has been shrinking for you? That's the first question. The second question, we have seen some placements of discount bonds by SberBank. The banks don't use that instrument very often. It's interesting to find out why you have been using it. Anastasia Savelyeva asked about the cost of risk on the corporate segment.
Your colleagues from VTB in the third quarter provisioned pretty heavily, if I'm not mistaken, because there were mass fraudulent loans. Did you have similar situations? Perhaps you might give us an insight into the scale of this problem.
Thank you. As for the liquidity, the situation has stabilized significantly at this time in the banking sector. We don't have any problems with the mandatory liquidity. You have seen the spreads on the key market flattening. We don't see any problem in hand. There was a crazy competition for the deposits that we were not really involved. As we conducted ourselves responsibly midterm, we had no problem with making a dash for the market share and increase that market share. But I think we took a step back in good time because the problem was not who went where. In banking, it was about who stopped in good time.
It takes time to see who was right. We think that the maneuver with the stoppage for us was at an opportune point in time. We don't see any problem with the liquidity. I think you're looking at the wrong indicator when you're trying to gauge the temperature with the liquidity. Right now, we do not see any situation. We don't see the situation to be the same as it was in the third quarter. There was a question of the discount obligation, discount bonds, well, for one thing, we have to support the market. The second point is we use all the instruments to raise funds. If we see a good opportunity, we go into the market and place, make a placement. There are some clients that ask questions that show demand for such instruments.
Our placements were, in some part, a response to the demands made by our clients. The situation has been evolving, okay? There was a shrinking of the portfolio in December. It was an unusual situation, very nonstandard. In January, we'd see a shrinkage. In February, we have seen a decline of the portfolio. To an extent, this is because the situation with liquidity has been stabilizing. If the market does not need that expensive money, the banks don't need that expensive money. This is the comfort that we gain from our AI leadership, our tech leadership. The macro things are worrying for us more. Higher rates will obviously trigger lower solvency, lower solvency, and more defaults, more non-paying customers. But a departure from the ability to use our risk assessment models, that's a problem. Last year, we showed the Central Bank.
Using the mandatory ratios, it might seem that, yes, we successfully used those things last century. But right now, the cost of risk has been growing. We showed the data to the analysts. In terms of regulation, the monetary thing that the Central Bank has been pursuing, that's the right thing to use. But in terms of managing the cost of risk and shrinking the risk sector wide, that has an inverse effect for the market. I have been showing our figures to the Central Bank, including the governor. They have been studying those figures. Motivations can be different. But going back to the fraud question, we have never had a problem with that kind of fraud. I can't really imagine anyone playing our models that big to create the need to provision for that risk. Not really.
Thank you very much.
Thank you very much for the question. We have been looking forward to a meeting with the girls from the journalist pool. Thank you very much, our journalist community. Thank you very much for your very stable and clear coverage of our news. Investors, thank you kindly. Thank you, team. We have been cherishing your confidence, your faith in us, and we will continue to do so, and we will keep doing all the good things to maintain that faith. You have the QR codes. We are wrapping up now. Please note our Telegram channel for the investors. You can learn the most topical news from.