24 May 2021
Sova Capital is pleased to present its audited financials for the year ended 31 December 2020.
Key highlights include:
– Profit before tax of USD 52.1m
– Profit after tax of USD 38.3m
– Total equity as at 31 December 2020 of USD 397m
– Core Tier 1 Ratio 21.1%
– Return on Equity 9.6% vs. Strategic Target of 15%
2020 has been a challenging year for all, but despite this Sova Capital continued to make strategic progress in a difficult environment: strengthening its risk and compliance framework; investing in enhancing our operational resilience framework; and continuing to provide exceptional support to our clients and colleagues.
The COVID-19 pandemic significantly reshaped the external environment creating high levels of market volatility and challenging global economic conditions, which placed significant stress on employees and the firm’s operating systems. Against this backdrop, Sova Capital demonstrated a resilient performance, a strong balance sheet and maintained a robust regulatory capital and liquidity position.
The pandemic did however have a material impact on first half performance due to lower asset prices, higher market volatility and reduced client activity. The second half demonstrated a strong recovery and on a full year basis Sova Capital ended the year with net profit after tax of $38m vs. $65m in 2019.
Our total assets have reduced by 18% compared to 2019, due to various factors, such as a decrease in our reverse repurchase balances from $1,500m to $1,182m; a decrease in open positions in financial instruments from $925m to $581m, with at the same time growth in our cash balances from $566m to $590m. This reduction in assets has been matched with a corresponding reduction in liabilities from $2,775m to $2, 198m and the company’s capital position remained stable at $397m.
Sergey Sukhanov, CEO of Sova Capital, commented:
“Despite the challenges 2020 has posed to the firm, Sova Capital continued to deliver on its strategic priorities: bringing value to Shareholders, Clients, Employees and Society. Sova Capital continues to diversify our business model and remains focused on expansion in terms of markets, clients, products, enhancing the customer experience, as well as maintaining a disciplined risk approach, optimising our capital base and strengthening our operational capabilities.
Our client relationships remain our top priority and we continue to provide best-in-class services across both developed and emerging markets. We made some key strategic hires in 2020 strengthening our talent further and this will allow us to achieve our future growth aspirations.
We remain confident for the future and expect a more stable environment in 2021.”