Good afternoon, investors, shareholders, and analysts. Thank you for waiting, and welcome to our conference call to the disclosure of Sberbank's consolidated financial results for Q2 and the first half of 2023 under IFRS. We have Taras Skvortsov, the vice.
Net profit: RUB 411 billion, ROE 25.4%. In nine months, RUB 1 trillion to RUB 27 billion, ROE 25.5%. Active customers grew, added one million since the start of the year, basis 109.5 million. Corporate customers, 3.2 million.
Number of MAUs of Sberbank Online app totaled 83.1 million. DAU/MAU ratio grows to 52.6%. Sberbank's SberSpasibo loyalty program, 89 million registered members. We see positive response from customers, loyalty program terms, cancellation of requisites and levels, and ability to customize favorite categories. Our goal is to encourage our loyal customers as much as possible and promote long-term cooperation.
Number of Sberbank subscription users is growing actively, thanks, among other things, to improved subscription terms and unchanged fees. Today's subscribers can enjoy free Sberbank card service, mobile bank services, up to five categories for increased cashback, audio and video streaming, favorable deposit terms, and other perks from Sberbank, and our partners in Q3, we expanded the privileges on payments and transfer.
The number of subscribers at the end of Q3 was 15.5 million, and today we are at 17 million of them, and in the last several months, we are increasing the new subscribers actively. High inflation remains the main challenge among external factors. We see a significant effect of the high key rate on the turnover dynamics of companies. The Sberbank index data, and you can access them by scanning the QR code on the slide, show a slowdown in turnover growth in all key industries.
In the industries focused on B2B, in manufacturing, transportation, and storage, the growth rates were high throughout Q3 compared to other industries. It's 13% year on year. The B2C industries, targeting final demand, showed a bigger slowdown to 11.4% year on year in Q3. Meanwhile, personal wages and income show the most stable dynamics. You can see that in all three quarters since the start of 2024, the growth rates of wages and salaries remained at 18-20% in nominal terms, while in real terms it was about 10%.
The leaders were the IT and communications industry, growth by almost 32% in Q3, manufacturing and construction. Even in industries with the lowest wage dynamics, their growth exceeded 12%. The dynamics of all personal incomes were slightly lower but still rather stable. This is the factor driving high consumption dynamics. The weekly October data showed that there was even a seasonal acceleration to 15.8%, almost 16% annual terms.
Given the dynamics observed, we maintained our guidance for the GDP at about 3.8% for 2024. In terms of inflation, our expectations align with the updated version of the Bank of Russia and are in the range of 8%-8.5%. Now let's take a look at our financial performance in detail. Net interest income increased by 14% year on year in Q3 and reached RUB 762 billion, thanks to the growth of performing assets and stable margin dynamics. Over the nine months, the growth reached 19% year on year.
Net interest margin was 5.86%, having gained 2 basis points over the quarter. A highlight of Q3 was the payment of record high dividends, which had a negative effect on the margin. At the same time, thanks to accelerated growth of loan yields at floating interest rates and the decreased FX volumes in our balance sheet transactions, we were able to maintain the margin at a high level. In this context, we see an opportunity to improve the margin forecast to 5.7%-5.8% for the year in general.
Speaking of lending activity, we saw high demand from corporate customers. The portfolio increased by 8% in real terms to RUB 26.5 trillion in Q3, with the market share reaching 32%. Since the start of the year, the portfolio grew by 13.9%. By the 1st of October, it was 14%. 1st of January, sorry. In terms of industries, high originations were in the residential real estate segment and transportation, communication, and energy. There was also a growth in demand for factoring products for working capital financing.
The portfolio of SME customers increased by 14.6% since the start of the year to RUB 6.4 trillion, while the market share grew to 44.6%. The average return on the corporate portfolio increased by 1.5 percentage points to 13.8% for the quarter, and the share of the portfolio at floating rates exceeded 65%. The quality of the corporate portfolio remained stable.
The cost of risk for the quarter decreased to a negative value of minus 0.1% due to disbursements to high-quality borrowers with a high rating, as well as the recovery of a number of non-performing loans. Given the current growth dynamics of the loan portfolio, we have revised upwards our forecast for the growth rate of the corporate loan portfolio for the banking industry to 18%-21% over the year.
In Q3 2024, the growth rate of retail lending slowed down amid high rates in the economy, tighter regulation, and the termination of some federal mortgage programs. The portfolio amounted to 18.1 trillion RUB, having increased by 3.2% over the quarter and by 12.4% since the start of the year. Sberbank's market share grew by 0.4 percentage points to almost 48% over the quarter. In Q3, the mortgage loan portfolio increased by 1.5%, by 8.3% since the start of the year, and reached 11 trillion RUB.
The completion of preferential mortgage programs resulted in a decrease in originations versus Q2. Our market share reached 55.8%. The demand for consumer loans in Q3 2024 slowed down significantly. The loan portfolio grew by 1.9% over the quarter and 8.6% since the start of the year. In consumer lending overall, at the end of Q3, Sberbank held a market share of 42%. The credit card portfolio continued to grow for the quarter and increased by 10.3% and 34.4% since the start of the year, and reached RUB 2.2 trillion.
Our share also increased to 51.4%. Car loans grew at the highest rate in Sberbank, 25.1% over the quarter and 78.2% since the start of the year, among other things, thanks to increased demand for cars and anticipation for an increase in scrappage fees. The car loan portfolio exceeded RUB 586 billion, and we increased our market share to 1.4 percentage points, to 18.9% over the quarter. Increased rates and the slowdown in the portfolio growth affected the cost of risk in the retail loan portfolio, which increased to almost 3%.
As for the forecast, we have revised downwards the expected growth rate of the retail loan portfolio in the industry to 10%-12% in 2024 due to high rates and tight regulation. That being said, we plan to be better than the market dynamics-wise. The multidirectional trends of the corporate and retail portfolios resulted in a neutral effect on the quality of the total loan portfolio. The share of the Stage 3 loans remained at 3.5%. The coverage of impaired assets with provisions remained at the level of the previous quarter, which is 127.3%.
Against the backdrop, the total cost of risk for the portfolio in Q3 increased to 1.16%, having amounted to 0.9% for nine months. Given the trends in retail lending that we see right now in Q3, especially for the retail, as I've said before, we haven't revised the yearly cost of risk forecast upwards to 110-120 basis points in total for the year. The increased rates led to stronger savings sentiments. Deposits went up by 2.8% over the quarter, or by 15% since the start of the year, and reached RUB 26.3 trillion . The market share totaled 43.6%
The overall increase in rates for new deposits led to an increase in the cost of retail deposits by 1.1 percentage points over the quarter, to 8%. We are lowering the forecast for the growth of retail deposits to 23%-26% due to heightened consumer activity that we are currently seeing. Funds due to corporate clients increased by 8.6% over the quarter to RUB 16.5 trillion . Sberbank's market share grew by 0.7 percentage points to 19.6% over the quarter.
The average cost of funds for the quarter also increased slightly by 0.5 percentage points to 10.3%. We are increasing the expected growth rate of funds due to corporate clients at the end of 2024 to 7%-10%, and we expect our share in this segment to grow. Net fee and commission income showed good growth in Q3, growing by 11.6% year on year, with income rising to RUB 218 billion in absolute terms.
In the global ranking of largest acquirers by the number of processed transactions, Sberbank ranked second, with a negligible gap of 1 percentage point from the leader, which is the largest American bank. This outstanding result is the result of implementing domestic solutions and our proprietary technologies. In Q3, we completed the migration of all our services for over 200 million active bank cards to our in-house processing platform based on Platform V. The platform demonstrates the highest performance and reliability.
Contactless payment methods are increasingly popular. We have already installed over 800,000 terminals accepting biometric payments, and the number of transactions using biometrics has exceeded 13 million. Over 16.5 million people use Sberbank's QR codes every month, of which more than 5.5 million are customers of our partner banks. Over the past 12 months, the number of active users has increased twofold, and the number of payments made has risen threefold to 100 million.
The turnover and number of payments for partner banks connected to Sberbank's QR is growing even faster. We see 3.5-fold growth against the twofold growth, and 1.8 million Sberbank terminals already support QR payments. In terms of operating efficiency, operating expenses in Q3 increased by 17% year on year. Our main growing areas are payroll and investments in technologies, including artificial intelligence.
At the same time, the ratio of operating expenses to income at the end of the quarter stood at 28.4%, while in the nine months of 2024, it was 28.8%. So we are within the targeted range that we put for ourselves. In terms of cost to income, we continue to improve the IT landscape by implementing the latest AI solutions. The number of GigaChat users grew by 25% over the quarter and exceeded 7.5 million people. We have released in October a new GigaChat MAX Model. The model is now more powerful and useful.
It gives faster and better responses in multiple areas: in chemistry, physics, biology, economics, medicine, law. It is also 25% better in solving mathematical problems. It's much better than the previous model. In addition, the model can stay in the context of a conversation, even in a complex one, and you can use images sent by the user. Overall, Sberbank's business shows good dynamics in the current environment. Operating income before provisions increased by 21.1% year on year.
Over the quarter, the profit before taxes in Q3 grew by 7.6% year on year to RUB 562 billion. The lower dynamic in the net profit is due to the fact that in the reporting quarter, we recorded an increase in the income tax rate to 25% on deferred tax assets and liabilities. This is a one-off factor. Equity grew thanks to the profit earned during the quarter and amounted to RUB 6.7 trillion. Common Equity Tier 1 grew by 4.9% in Q3 to RUB 6.06 trillion, and the total capital grew by 4.7% in Q3 to RUB 6.42 trillion.
Risk-weighted assets increased by 6% over the quarter to RUB 53.3 trillion against the backdrop of loan portfolio growth and an increase in regulatory macro add-ons in the retail portfolio. RWA density slightly decreased by 0.4 percentage points to 87.1%. The base capital adequacy ratio Tier 1 stands at 11.4%. Capital adequacy ratio under N20.0 was 12.9% at the end of the quarter. That reflects the growth of RWA coupled with the dividend payout in Q3. In Q3, the dividend payout added 1.4 percentage points.
The weakening of the ruble and the decrease in federal loan bonds also had a negative effect by the end of the year. We expect our capital adequacy to recover to the target level of 13.3%. And finally, once again, I would like to give you the summary of our expectations for this year. I would like to note that despite the change of the margin indicators and cost of risk indicators, our ROE target is 23%, and it will remain for 2024. Thank you for your attention, and I'm now ready to answer questions.
Thank you very much, Taras. We begin our Q&A session. To ask a question, please raise your hand using the reactions icon in SberJazz, and then we will invite you to ask your question. Please make sure you turn on your microphone, and if you'd like, you can also turn on your video.
Please let us know who you are, even if you're asking a question in the chat. We also accept questions there, but only if you have identified yourself. The first question comes from Yevgeny Alfa. Yevgeny, the floor is yours. Taras, Anastasia, hello. Thank you very much for the presentation, and congratulations on the results.
My questions will be about corporate lending. What is the state of the latest originations in October? Is there any slowdown? And what is the spread that you quote the new companies with, and how does it compare to previous quarters? And as for the quality of the corporate lending portfolio in that specific segment, do you have any cases, any examples of industries which, amid growing rates or for some other reasons, economic reasons, for example, could require additional attention and could increase the cost of risk this year or next year? Thank you.
Thank you, Yevgeny, for the question. In our reporting for the third quarter and the previous statements in September, according to RAS, we said that corporate lending was indeed the most rapidly growing area at the moment. As for the volume of originations, of applications, yes, indeed, that is the main reason behind the growth of the portfolio. We see in the banking industry today, on the one hand, very high interest rates offered by banks.
The Key Rate is the basis, and add to that the additional spread which banks require from borrowers in order to disburse a loan. This also has to do with very tight competition for customer funds. Banks are actively raising customer funds in the corporate and retail segments alike with a significant spread. The trend is that over the past month or so, the spread, the Key Rate spread, has been consistently growing. Despite that, there is demand. The demand maintains.
Of course, we see that in the current climate, our requirements for the borrowers have been getting higher and tighter because the bigger the loan, the higher should the quality of the borrower be. And I have to say that in our case, the demand, as we see, has been skewing towards very high-quality borrowers who come to us because we, I would say, thanks to our targeted action to maintain high reliability, we offer high capital adequacy.
There are a lot of banks that, thanks to active lending in the previous months, have utilized their capital, and they do not have that generous of provisions for new originations. So we see higher quality borrowers, and we also see this overflow from other banks to us. So with the significant growth of the corporate portfolio, we see the corporate lending market share also growing 32%, as I said.
Once again, I'd like to reiterate that we have seen higher quality borrowers lately, and we have increased our requirements. So the cost of risk is not a concern in this regard. As you see, the cost of risk has improved. And overall, what we've done regarding cost of risk throughout the year has all been underpinned by the growth dynamics and the portfolio, and the corporate portfolio has been performing particularly well. The next question is from Elena Tsareva, BCS.
Thank you for the presentation. I also had a question about the cost of risk and the quality of assets. Regarding corporate lending, you mentioned the cost of risk. What is the maybe more normalized cost of risk in the third quarter? And also, if I'm not mistaken, you are transitioning or planning to transition to the internal risk assessment methodology when it comes to corporate risks?
If I understood correctly, what is the expected effect on the cost of risk? And also, I would like you to, I would like to ask you to tell us a bit more about the cost of risk in retail. In the retail segment, what has been behind this dramatic growth of the COR?
Thank you, Elena. As for the normalized level, there are a lot of factors at play. Even if we purify this from the recovery of problem assets, well, we do this in every quarter. And in every quarter, we have some recovery, some repayments.
So the cost of risk over the past quarters, well, maybe in the first quarter, it was a bit higher, but usually the first quarter, in terms of the cost of risk in the corporate segment, is usually better than in other seasons because the recovery rate usually happens in the fourth quarter, and in the first quarter, there is a bit of a valley. So values that do not take into account the recoveries, I don't think it would be wise to announce those because the recovery rates should always be considered.
As for our approach to assessing the cost of risks, our estimated provisions factored in the financial performance are already based on our models and the ratings that we use for our customers. So this is not a one-off effect. We do not expect any one-off effects from it. We have already done it, and we have already adopted this internal methodology. As for retail, there is no secret. The quality of secured loans, mortgage loans, for example, has been stable. So we have a big share of mortgage loans specifically.
C redit cards and consumer lending, there the cost of risk, the level of risk has been growing. And it would be strange to expect otherwise because the level of interest rates offered by banks for these loans have radically increased versus last year or the year before that. But we have been responding to this. We manage the margin factoring and the risk. The risks have grown. The margin has grown also.
In October and in September as well, we saw that banks, our competitor banks and Sber as well, have become much more demanding when it comes to the quality of borrowers. And in consumer lending, the originations, the number of originations have gone down compared to August or July. I think this trend will persist, and there will be, as always, tight competition for the quality borrower.
And if you're a low-quality borrower, it will be getting increasingly more difficult to get a loan from a bank, especially given the macro add-ons for the limits, the macroprudential add-ons that exist at the moment for the banks. So these borrowers will have a hard time. But all in all, in September, for example, in consumer lending, we had negative growth in cost of risk. So the trends have been slowing down in the fourth quarter. And for the year in general, we do not think the situation will drastically change.
We do not expect a significant growth in consumer lending, in credit cards. Well, there may be some in credit cards, but mostly thanks to the drawdown of the customer base that has already been accumulated. Thank you, Elena. Our next analyst, Dmitry Donetskiy. Solid. Dmitry, over to you.
Good afternoon, Anastasia and Taras. I have the following question. There is this first case I wanted to discuss. Corporate lending next year with a current high rate. What is your vision as to the demand? At which point will the demand decrease? Because right now, the demand is very high, and it hasn't shown any signs of decreasing so far. And the second question is about fee and commission income. What is the reason behind the discrepancy between the fees and commission income growth under RAS and the IFRS value?
Thank you, Dmitry. As for demand, as I said, in retail, we have already been observing that the demand has been going down, and the approval rates of banks for applications have also been going down. As for the corporate segment, some of the projects that have already been launched, that concerns investment projects in communications, in transport, in mining. So with projects that are ongoing, the corporate customers have been drawing down their funds.
But the banks are very much focused on getting increasingly more cautious about new investment projects in anticipation of better, more favorable economic conditions. I don't think it will happen tomorrow or in November, but I do think this will be the trend for the near future. We see it in retail, and I think this will also be happening in the corporate segment as well.
As for the discrepancy in the fees and commission income, the reason is that under Russian laws, commission income does not include conversion transactions as opposed to IFRS. That includes cash and cashless. And also another difference under RAS, it includes insurance income, but IFRS does not include insurance income in these fees and commissions income. But I would advise you to use the IFRS figures in your models. Thank you, Dmitry. Moving on. Mikhail Ganelin, Aton.
Thank you, colleagues. Hello, everyone. I have a question once again about loans. What are the main purposes that companies have been raising capital from banks for? That's question number one. And the second question is, you have very low cost of risk for corporates, and this surprises me.
We know that there are companies in Russia with high leverage, and given the floating range and the difficult economic conditions, how do you approach these clients, these companies? Do you have individual terms for them? Do you see any specific risks in this context? Thank you.
Yes, thank you, Mikhail. It is important to understand that the cost of risk is indeed negative, and it cannot last for long. It will get normalized next year. As we are preparing for the Investor Day, which, by the way, will take place on December 6th, you're all cordially invited, we will announce our 2025 forecasts and guidances in more detail. But I will say for now, right now, we have to understand that the borrowers that come to us are indeed high-quality borrowers. We are very demanding when it comes to selecting the borrowers.
That concerns the rate and also the evaluation of their financial position. But they do meet these requirements, and this is why we disburse the loans to them. How do they achieve this? These are companies that do not have that high of a leverage. They have sustainable cash flow. As for the terms, usually when it comes to residential real estate, it could be one year, two years, or over. As for investment projects, we're also talking about one year or longer.
As for the customer segments, in the small business segment, medium-sized business, there the growth has slowed down. Mostly, we are talking about high growth in the large company segment. Big companies that the list is, I don't know, 200 or something, 200 companies-ish. These are the high-quality borrowers with which we do not anticipate any problems in the future.
But we do not expect the cost of risk to persist at the negative level for long. As I said, we believe it will be normalized back to the standard cost of risk that we usually showed for the corporate portfolio.
Thank you.
Thank you, Mikhail. If you have a follow-up question, do come back with it. We are moving on. Next question comes from Svetlana Aslanova. Analytical Technology. Svitlana, you are on mute. Please make sure your mic is on.
Hello? Apologies. Good afternoon, everyone. Thank you very much for the presentation. I have a few questions just to clarify your position. What is the share of preferential mortgages in your mortgage portfolio? And also, I would appreciate it if you added some color as to the part of the portfolio where loans were dispersed at very low market rates. Do you have an opportunity to raise those rates? If you do, what will be the impact on the margin? That is my first question.
As for the loans that we have already disbursed, they are being serviced. I'm talking about mortgage loans, obviously. They are being serviced very well. The speed of early repayment has been adjusted to the current situation. Do we have an opportunity to raise the rates? We are not considering this at the moment. We have an agreement with the clients, and we are going to honor the terms. The clients can make an early repayment, or if they can't, or if they don't want to, they will do this in the time stipulated in the agreement.
As for the preferential mortgage loans, the effective rate is changing based on the Key Rate. As for the rest of the portfolio, the rate is fixed, the one that was in force at the moment of disbursing the loan. Thank you. Another question to clarify. You said that until the end of the year, you expect the recovery of N20. What are the factors, in your opinion, that will be driving this, that will facilitate it? Indeed, we have this goal in the strategy, 13.3%, the minimum level of N20. There are several factors which in Q4 will be making an impact.
The biggest factor is net profit. With our ROE guidance, we plan to have a significant net income in the fourth quarter. Factor number two is we see decreasing growth rates in applications and approvals for consumer loans, unsecured loans with high risk weights. So the decreasing growth rate of that portfolio adds to the capital adequacy. Another factor is the overflow from the retail segment to the corporate segment, which has been increasing. In the corporate segment, the risk weights are lower.
And so together with the clients, we strive to structure the deal to make sure the load on capital is smaller. Also, we have tightened our requirements for the loans given the risk weights. We have our internal system to oversee and supervise the decision-making, and there we included these tighter requirements for minimal yields for the loans. And also, in the fourth quarter, we expect a decrease of the Key Rate, revaluation of OFZ in the other direction, which will also help us grow capital and return N20 to the values that we targeted in our strategy.
Some special solutions and special dedicated decisions or one-off actions to improve the capital adequacy ratio are not planned. These are our actions to ensure the stability along with our stability of the bank. Yeah, that's great. I just wanted to ask once again that the density of the assets that we have seen in Q3, it went down from Q2 slightly. It's not a one-off factor, but it is a trend that you look at and that is going to continue. Yes? Is that correct? Well, the average indicator is always average.
It does not really show the details, but the major factor of decrease of our RWA density in Q3 is the higher growth of the corporate portfolio over the retail portfolio. At the same time, the borrowers were of high quality. That was a factor. In Q4, this trend is for sure going to be maintained. Whether the RWA density will decrease in Q4 is not a given, but it might happen.
This is our goal anyway. We plan to increase our capital adequacy ratio. Understood. Thank you very much. Thank you, Svitlana, for these interesting questions. Next question from Olga Naydenova from Sinara.
Hi, everyone. My name is Anastasia. Thank you very much for the call. A couple of questions. One related to the NIM at the start of Q4, the funds due to clients, the retail and corporate funds due to clients, the gap between them increased dramatically. And I hear the question, like, you increase the forecast for net interest margin. The question is that the LCR standard will grow. How will that affect the margin? And how will that restrict the cost of funding? That's my first question.
Yeah. So as for the short-term liquidity standards, it will increase in January. So in Q4, we're going to continue to operate in the same conditions that we operate right now. You are correct. The corporate and retail deposit rates are becoming more and more expensive compared to the key rate. I've mentioned that, and we see that trend. One of the reasons for that is the need for the banks to ensure that they meet these standards.
Now, as for the policy that we use for the rates and the terms of the deposits, now this strategy factors in the increase of that norm in January 2025. So N26, whether that's going to be increased, it's hard to say right now, but we factor it all in, in all our results. The stress for the bank was when the central bank from March 2024 went back to enforcing this N26 norm. The central bank gave time for the banks to adjust and to factor that in the relations with the customers.
We have been living with this norm for quite a while now. The margin is stable, as you can see. There are no major deviations that we expect related to that. If I can question about the capital adequacy ratio and the dividend decisions, as far as I understand, this is, I mean, I understand that this is not something to discuss today, maybe dividend-wise, but what restrictions do you have in terms of these norms when you make this decision? And will there be some minimum level that you are going to adhere to?
We have an approved dividend policy. The minimum is 33.3%. We do not see any indicators to change that. Our task is to improve the capital adequacy ratio thanks to profits and thanks to managing the risk weight of the loans that we disburse, their quality. And this is what will drive the dividend-wise decision.
We are committed to ensure half of the profits that is going to be shared with the shareholders in the dividend policy. And we're going to do that based on profit, capital adequacy ratio, and other factors. Thank you. Thank you very much. We're now moving to the questions from journalists. Anastasia Savelyeva, Interfax. Hello. The first question, the increase of the rates to 21%, how will that affect the results of the bank? Do you agree with other bank sentiments that in short term it will give you the positive effect?
And the other question, to what extent the corporate and retail loan dynamics will slow down? To what extent it will be slower than this year? Yes. Thank you, Anastasia, for the question. As for the dynamics for 2025, as I've said before, we're going to disclose it on the 6th of October on the Investor Day. We're currently doing the business planning. The dynamic is going to be affected by many factors, not only the key rate that can also change, by the way, given the decisions by the governors of the bank.
This year, the state programs is another important factor. We're talking about the corporate lending programs and subsidized mortgages. So we're going to gather all these factors, and we will give you the most realistic forecast possible on the Day of the Investor. Now, it's a bit early to talk about that. As for the key rate influence on our indicators, yes, we have some positive effect from the hike. It's around RUB 20 billion in yearly terms right now for the one percentage point of increase of the rate.
That's the effect, RUB 20 billion, one percentage point. But in the first two months, the effect is going to maximize. Further on, the revaluation of our deposits is going to offset this positive effect, and we will basically go to this RUB 20 billion for one percentage point effect. So we have always looked into that and factored that in. We have the increasing number of loans in the floating rate, within the floating rate.
So that positively affects our results, and it obviously is reflected positively in our financial results, and we're going to see that in the next several months. Thank you. Thank you very much. Next question, Yulia Savelyeva from Frank Media.
Hello, can you hear me? Yes. Yes, go ahead. Thank you for your presentation. A couple of questions. First, the growth of the provisions is related to the retail loan growth, and it was a 2.5-fold growth. Why would you need to make all the provisions for that? What part of these costs is related for the retail and what for the corporates? And what provisions were created due to fraud in the retail lending? Overall, what is happening with the demand on the family mortgages after the initial installment limit was increased to 50%?
And as you answered the question, you said that the cost of risk is going to decrease as you plan to give loans only to the high-quality borrowers. Do you expect the RWA indicator to change, to grow? The last question, do you plan to use the new norm of the central bank? Can you give some color on that? Thank you.
Right. I'll start from the first question. As for the growth in the provisions, it's pretty easy to calculate how much provisions we need for retail and corporate clients. For the corporate clients, the provisions are being replenished in the first quarter. So all of our provisions, or even more than that, are all the provisions for the retail customers. Why are we building them? Well, it's obvious that the provisions are being created when the bank sees some deterioration in the quality of the servicing of the debt.
Clients go to defaults or refuse to pay. We get the money, but still, there are some we do lose, and the provisions are not created to the level of 100%. The longer the customer doesn't pay, the more the provisions are. It's a direct correlation in terms of how the customer services their debt and how much reserves and provisions are being created by the bank. Now, as for the family subsidized mortgage program, the demand for the family mortgage is pretty stable.
The disbursements for the family mortgage are mostly correlated not only with the demand, but with the limits that the banks have for these loans. When we eat up all the limits, as we are seeing right now, because we have recently informed the customers that we are not going to get new applications for these mortgages because the current number of mortgages is even higher than the limit that we have, and we expect the possible increase of this limit from the regulator, and then we will be able to get new applications.
But for now, the demand is higher than the offer, and that means that there are no major deviations here, really. The initial installment can be less than 50%, by the way. For us, it's not a restriction. The cost of risk. I think there was a question about the cost of risk. Can you comment on that? We didn't tell that we decreased the boundary for the corporate lending cost of risk. We have mentioned that in terms of our expectations, the quality of the corporate portfolio is better than that of the retail one.
At the same time, we have our cost of risk, total cost of risk, and we increased that. And that is also due to a worsening quality of the retail portfolio, not the corporate one. As for the short-term liquidity standards, we are working within the restrictions that we have to, and we are meeting the requirements for the second half of 2024. As for 2025, the minimum requirements are going to increase, and that will mean that we will increase our liquidity, and N26 is going to be increased, therefore, to meet these new requirements.
But there is no need to have a higher N26 in advance because, I mean, that costs money for banks. It decreases the volume of the loans that we can give and the volume of the liquidity that we have to store without putting it into loans. So we don't need to meet this N26 standard in advance. As I've said, it won't really affect our interest policy, deposit-wise. We adapted it to make sure that the deposits that we have for six or nine months next year will be used by us to ensure that N26 is met. Thank you. Another question, Yulia Koshkina, RBC. Hello, can you hear me? Yes.
I have a question about the plans of Sberbank on reorganizing in terms of the federal law 292 by creating the assets and liabilities that were frozen during sanctions and creating a special legal entity for that. You said that you are waiting for the green light from the central bank to create such a legal entity. Are there any developments there? And if so, what will be the timeline for this procedure? Thank you.
Thank you for the question. We did apply to the central bank in line with the procedure that is prescribed by the Russian law, and we are waiting for the response from the regulator. So no major news here. I can only say that we can assess the timeline if we get the positive result. There will be around two months before we launch such an enterprise. So it is not going to happen in 2024, very unlikely. Our forecast does not really factor in an additional effect from this possible project. Thank you.
T hank you. These were all of the questions from the journalists. We only have five minutes to answer quick questions from the chat. We'll try to do it in five minutes. I will select the questions that were not answered during the call. The operating expenses, there was a 19% of OpEx. So why so much? What do you spend it on?
I tried to show in the presentation the growth of wages industry by industry. We saw a more than 30% growth in IT, for example. And as you know, Sber at the moment is pretty much an IT company. By now, we have a lot of IT staff, a lot of IT experts. We are, of course, interested in keeping the high-quality talent pool that we have in IT at the moment. This is a big factor, and this is the current situation in the Russian economy with a high level of unemployment. Another thing is that we keep investing in technology.
This concerns not only our expenses on our own IT specialists, but it also concerns other forms of investment in hardware and software that we buy. The two main factors are IT investments and competition for talent. The expenditure growth rate in Q3 slowed down versus the first half year. Overall, over the year, we believe we'll be able to maintain our guidance. The target that we have is 30% cost-to-income ratio, and we have been adhering to that target. This is what we are focused on. Thank you.
There are concerns about the fact that recently the media said there's a possibility to introduce taxes on extraordinary on surplus profits in banks. Yes, we have seen that as well. We have read the news as well. As I said, in the banking industry at the moment, what we see increasingly is capital deficit, and we see that banks increasingly need capital to continue lending.
With the capital deficits, well, lending is the main driver behind capital growth. It would be very risky to additionally take capital for the budget, and if that happened, of course, the banks would have to respond by further decreasing their lending, and that would be a significant additional load for the economy. In our forecast, we do not factor in the effect from the introduction of this regulation because, from what I've heard, this regulation is currently at the level of an initiative that didn't elicit much enthusiasm and support in the government as well. Thank you.
A lot of questions about the 2025 plans, but you said that on December 6th, on the investor day, we will be discussing that in great detail. So I'm not going to ask those questions just yet. I think the last question we will take is about the technology solutions used by Sber. Are we using any AI-based technology solutions in our channels? We do employ artificial intelligence very actively. Roughly 80% of all our processes, in one way or another, have an AI component. It's not the availability of AI in the processes that matters, but the extent to which it is applied.
The effect from AI has been growing several hundreds of billions of RUB, and the effect has been only growing. There's a huge potential in it, especially amidst the changing nature of AI. We see AI getting increasingly more intelligent, and it has been of great help. Speaking of our branches that deal with customers directly, of course, they do employ AI as well, for example, as a client manager assistant, where AI helps customer managers to identify customer needs better and give more helpful answers to customers' questions.
So yes, AI is very helpful. It helps us provide even better customer service. Thank you very much. This concludes our call. We are five minutes behind the schedule. Thank you very much for participating, and just a reminder that the 6th of December, Investor Day, we will be announcing this again and again in our channels. This will be a big event.
Also, in our Sber Investor channel, we have a separate room, a separate channel for investors specifically. On your screens, you can see the QR code that will help you subscribe to that Telegram channel for investors. This is where we will be publishing important news pieces and announcements. So do take advantage of that channel. Thank you very much, and that's a wrap. Have a great day.