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RIA Rating – 21 Feb. Ended the year 2019, in the dynamics of lending in nominal terms, was relatively weak. According to Bank of Russia loan portfolio of banks for the year increased by only 4.6%. For comparison, in 2018, the growth rate was much more – 12%. The result of 2019 was weak not only relative to the year before, but relative to previous years. In particular, the increase in 2019 was the third worst result in the last ten years. Largely weak nominal growth rate of lending at the end of last year are associated with negative foreign currency revaluation due to the strengthening of the ruble. Without taking into account currency revaluation the rate of growth of the loan portfolio in 2019, according to experts RIA Rating was +7,79 percent of 7.77% for the same period of 2018. Thus, the real growth rate of the last two years was at a comparable level, but the result of 2019 was a little better.
Lending to the economy (legal entities and individuals) in nominal terms at the end of 2019 rose 6.5%. In absolute terms, lending to the economy increased by 3.2 trillion rubles to 51.4 trillion rubles on January 1, 2020. The bulk of credits to economy – corporate loans, which amount to 33.8 trillion rubles, while loans to individuals accounted for 17.7 trillion rubles. In recent years, retail lending significantly faster than the dynamics of corporate lending, and as a consequence the share of consumer loans in the structure increased. In particular, on January 1, 2020, the share of retail lending amounted to 34.3 per cent against 30.9 per cent at the beginning of 2019. It is worth noting that the share of retail loans in the loan structure increases for the fifth consecutive year, and the result of 2019 was the highest in the modern history of Russia. According to experts RIA Rating, in 2020 retail lending will continue to be the main source of growth of lending to the economy, as a consequence, its share for the year has increased.
Retail lending continues to “pull” the banking sector up
Retail lending in 2019 was characterized by high growth rates, but compared to previous years the rate decreased. According to the Bank of Russia, volume of loans to individuals for the 2019 increased by 18.5%. For comparison, in 2018, 2017 and 2016 a growth of 22.3% +12.7% and +1.4%, respectively. Thus, in 2019 interrupted the trend of increasing growth rate in retail loans, which began in 2015. The slowdown in growth was the result of regulatory deterrence by the Bank of Russia. Recall that in 2019 there were several times increased risk coefficients on unsecured loans, and also introduced the marginal debt load. According to experts RIA Rating, in 2020 the rate of growth of retail lending will continue to slow due to regulation of this market, and at the end of the year the rate can be 13-15%.
Corporate lending in nominal terms at the end of last year showed a relatively weak trend. The volume of corporate loans over the past year grew by only 1.2% in nominal terms, against +10.5 percent a year earlier. The real growth rate of corporate loans for the year 2019 was +4.3%, which is generally not very much inferior to the result of 2018 (+5,1%). It is worth noting that in 2019 the growth rate of corporate lending could be much higher, however, companies often prefer Bank loans debt bond market. In particular, according to estimates of RIA Rating, the volume of corporate bond debt in circulation in 2019 increased by more than 1.1 trillion rubles (bonds in rubles and foreign currency), and in 2018, the company actively repay the old editions than put new. Thus, if in 2019, the corporate clients would have taken loans for a comparable amount of bonds, the growth of debt in nominal terms amounted to 4.6%, and real – 7.6 percent. In General, the development of the capital market will be somewhat slow corporate Bank lending, and increasingly shift the focus of banks on the retail market.
Interbank lending is the only one of the three types of lending, which in 2019 was characterized by a decrease. According to statistics, the volume of granted interbank loans for the year decreased by 4%. The decrease in this type of lending due to the significant share of foreign currency loans and a reduction in internal lending due to mergers and acquisitions. Most likely, that is why the volume of interbank loans to resident banks for the year decreased by 6.1%, while to non-resident banks increased by 5%.
A local maximum on the share of banks with loans provided by large banks
To assess the situation in the context of individual credit institutions, the Agency RIA rating on the order of AEI PRIME conducted an analysis and prepared a ranking of banks in terms of loan portfolio by 1 January 2020. The ranking presents data for 392 credit organizations in Russia with non-zero volumes of loan portfolios that are licensed on February 21, 2020, which published the reporting according to the form №101 on the website of the Central Bank of the Russian Federation.
In the rating of banks according to the survey, at the end of 2019 positive dynamics of the loan portfolio was characterized by 229 banks. The share of banks with loan portfolio growth for the year has increased to a maximum in 2015. For comparison, in 2019 58.4% of banks showed an increase of the loan portfolio, whereas in 2018 and 2017 – 56% and 45% respectively. Experts of RIA Rating expects that in 2020 against the background of lower interest rates, more banks will be lending activity, as a consequence, the share of banks with positive dynamics of the loan portfolio will continue to rise.
Among different size groups of the TOP 200 divided by 50 banks, the share of banks with the growth of the loan portfolio differed quite strongly in the range of 24 percentage points (from 54% to 78%). In particular, the highest share of banks with growth of the loan portfolio was characterized by the banks of the TOP 50. Also a high proportion of banks with an increase observed in banks from 51 to 100 seats – 76%. Whereas the two groups of banks of the second hundred in the volume of loan portfolio was characterized by a less than outstanding result. Banks with 101 to 150 seats 151 and 200 places, the share of banks with a growth of 58% and 54%, respectively. At the same time outside the second hundred (with 201 392 seats), the share of banks with loan portfolio growth was only 45%. Thus, there is clearly a pattern that large banks are much more likely to exhibit growth in its loan portfolio relative to the average and small credit organisations.
Large banks are not only more likely to show a positive trend, but in General, the growth of loan portfolio was higher. TOP 50 banks by 1 January 2020, the controlled total loan portfolio 59.6 trillion rubles, which is 6.2% more than these same banks on January 1, 2019. Even higher growth rates were 51 banks with 100 places, the total loan portfolio which increased by 11.2%. In turn, banks of the second hundred (101 to 200 seats) of the total loan portfolio for the year virtually unchanged. While outside the TOP 200 of the total loan portfolio to the result of the year increased by only 0.3%.
Foreign banks in 2019 was able to show the strongest results
All types of banks by form of ownership was rather high growth of loan portfolio in 2019, but the ranking is led by foreign banks. The credit portfolio of foreign banks in nominal terms for the year increased by 7%, while state-owned banks, the growth was 6.2%, while private banks – of 6.1%. Among the largest banks continue to be dominated by state-owned banks. In particular, among the TOP 10 banks – six are state-owned banks, and two representatives from private and foreign banks.
According to the survey, the top ten banks in Russia in 2019 have not changed very much. So, the six largest banks in terms of loan portfolio remained on their positions relative to the result at the beginning of the year. The highest increase of the loan portfolio in the TOP 10 was characterized by the Bank FK Otkrytiye PAO, the loan portfolio which for the year increased by 85%. Impressive growth was achieved accession in the early years of the Bank and growth in corporate and interbank lending in the second half of 2019. As a consequence of the high growth rate of the Bank rose from 9-about place on 1 January 2019 up to 7-on places in the current ranking. Second, the growth rate of was Bank TRUST, its credit portfolio grew by 27%. Significant growth of the loan portfolio in 2019, allowed the Bank to re-enter the TOP-10 banks by size of loan portfolio and the current rating of TRUST Bank occupies the 8th place. According to experts RIA Rating, the dynamics of the loan portfolio of the Bank TRUST can be associated with the transfer of non-core assets within the framework of the establishment of the Bank/Fund bad debts. Also its position among the largest banks were able to strengthen Raiffeisenbank, which was the consequence of the growth of the loan portfolio in the past year 19% (+1 position to 9th place). On the other hand, a strong enough decrease in the loan portfolio in the first ten demonstrated UniCredit Bank, loan portfolio whose 2019 decreased by 19.5%. Because of this, the Bank dropped to 10th position against 7-on space on January 1 last year. From UniCredit Bank in the past year has seen a strong reduction in interbank and corporate lending.
Among the banks first hundred highest increase in absolute terms was characterized by the Bank FK Otkrytiye PAO, the volume of the loan portfolio which in 2019 increased by 768 billion rubles. The second largest growth of the loan portfolio was Sberbank, the growth of its loans amounted to 397 billion rubles. Third and fourth credit institutions on loans in the past year were Bank GPB (Gazprombank) and Russian agricultural Bank, the loan portfolio which increased by 296 and 266 billion rubles, respectively. The top five banks with the largest increase in Bank TRUST, its loan portfolio increased by 217 billion rubles. On the other hand, the largest reduction in loans among the largest banks was characterized by UniCredit Bank, the volume of its loan portfolio in 2019 decreased to 234 billion rubles. Also, a significant decrease of loan portfolio was observed in Mosoblbank, which amount of credit debt fell by 122 billion.
Best relative dynamics of the loan portfolio among the TOP 100 largest credit institutions in 2019 was at Deutsche Bank, credit portfolio which has increased almost 3 times. This significant growth has allowed the Bank to rise by 50 positions to 68th place on the ranking on 1 January 2020. Basically, the impressive dynamics of the loan portfolio of the Bank associated with an increase in interbank and corporate lending. Second, the growth rate of loan portfolio was the Bank BUILDING.Of the Russian Federation, the loan portfolio which grew 2 times, thus the Bank was able to take 26th place in the rating (+18 positions). The third on the dynamics of the loan portfolio was the Bank FK Otkrytiye PAO, the volume of loans which grew by 1.9 times (+2 positions 7-e a place). It should be noted that 7 banks from the first hundred of loans was characterized by high growth rates, which ranged from 50-85%.
the Share of overdue debt increased sharply, but this is largely a paper increase
growth in the volume of overdue debt in 2019 was big enough by the standards of recent times. The volume of overdue debt in the Russian banking system over the past year increased by 20%, or 605 billion rubles, against increase of 57 and 102 billion in 2018 and 2017. The growth of overdue debts ahead of the dynamics of the loan portfolio, as a consequence, the share of overdue loans is increasing. On January 1, 2020, the ratio of arrears to loan portfolio amounted to 5.4% compared with 4.7% on the same date in 2019. It should be noted that a local maximum in recent years the share of overdue debt in August 2016, when the delay was 5.88% of the loan portfolio. While much of the growth delay was the result of a change in accounting policy. Now overdue receivables and overdue on the acquired rights requirements is included in loans payable. According to estimates of RIA Rating, is almost completely ensured the growth of arrears, and payment discipline has changed slightly. It is worth noting that the arrears were observed only in 50 banks from the ranking, in which the main focus portfolios acquired rights requirements.
The dynamics of the overdue debt share in different aspects of lending differed strongly enough. So the share of overdue loans in the corporate loan portfolio 12 months ended January 1, 2020 increased to 7.8% (+1.5 percentage points). In this type of lending are the main portfolios of the acquired rights requirements. The share of overdue debt on interbank lending for 2019 has increased by 1.5% (+0.2 percentage points). In turn, only retail lending for the year was characterized by declining share of overdue debt to 4.3% on 1 Jan 2020 (-0,8%). As mentioned earlier, according to the RIA Rating, despite a marked paper, the growth of overdue loans to legal entities, actual payment discipline remained at the same level.
The leader among the one hundred largest banks on the dynamics of the overdue debt share in 2019 was Minbank. The increase in the share of overdue debt it is largely associated with the deterioration of the assessment of quality of credit portfolio of legal entities. the share of overdue debts of the Bank for the year increased by 34 percentage points to 36% on January 1, 2020. On the second place on growth of outstanding debt among the largest is the Bank TRUST, the share of overdue debt which for the year increased by 28 percentage points to 62%. It is the Bank TRUST, as a Bank/Fund bad debt reflected on its balance sheet the bulk of the delay in connection with the transition to the new account.
It should be noted that the remaining banks from the ranking of the arrears was much lower. In particular, Investtradebank, which took third place in the dynamics of delay in 2019, a growth delay was only 7 percentage points to 46% in this rating. Overall, the strongest changes in the share of overdue debt was from the rehabilitated banks.
The leaders by the share of outstanding debt among the largest banks continue to be a credit institution in the status of rehabilitated. In particular, the largest share of arrears by 1 January 2020 was characterized by Tavrichesky Bank, the share of overdue debt of which was an impressive 72%. The second was also reorganized Bank TRUST, the share of overdue loans which on January 1, 2020 amounted to 62%. It is worth noting that 11 banks with the largest amount of delay among the TOP 100 largest banks are in various stages of rehabilitation.
According to analysts at RIA Rating, the situation with crediting in 2020 can be improved relatively 2019. In particular, it is possible to expect growth of corporate lending, the growth of which will be observed on the background of economic recovery and lower rates. Whereas retail lending, in 2020 at least and will continue to slow, but growth is likely to remain a two-digit (13-15%), which in General will give good growth in monetary terms.
the Ranking of banks in terms of loan portfolio by 1 January 2020 in PDF format >>
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