Russian banks: financial results for 1st quarter of 2020

Corporate loans showed a record growth, but growth of lending to individuals has slowed. The share of NPLs is still low. The volume of deposits grow slowly, and Deposit rates have reached a historic low. The banks made good profit. The first data about results of work of banks in the month of April. The beginning of 2020 was quite successful, but the major problems of banks is yet to come.

At the end of the 1st quarter 2020 key performance indicators of banks grew. However, due to problems of the Russian economy growth rates of important indicators compared to the same period last year slowed down. In addition, perhaps because of the quarantine, the Bank of Russia has published consolidated reports on the banking sector for the 1st quarter of 2020 in a slightly reduced volume.

According to the Bank of Russia for the 1st quarter of 2020, assets of banks increased by 8.8% and amounted to 96.6 trillion. rubles.

The amount of loans to natural persons grew by 3.7% and amounted to 18.3 trillion. rubles. The greatest increase occurred in the last week of March, due to increase in demand prior to the imposition of quarantine in the beginning. The share of overdue loans to individuals amounted at the end of the period of 4.5%.

The volume of loans to companies grew by a record 7.8% and amounted to 35.2 trillion. rubles. The peak of the renditions fell on the last week of March that is due to the need to compensate for the fall due to the introduction of quarantine cash flows of the companies. For comparison – 2019 for the full year, the portfolio of loans to companies increased by 5.8%. The share of overdue loans to companies amounted at the end of the period of 6.8%.

The volume of deposits increased during the 1st quarter of 2020 by 2% to 23.3 trillion. rubles, balances on current accounts of individuals increased by 6% to 8.1 trillion. rubles. A significant part of the increase is driven by capitalization of banks accrued interest on deposits. The average weighted interest rate on ruble deposits of individuals slowly decreases.

The total amount of deposits and the funds of organizations in the accounts for the 1st quarter of 2020 has increased by 11.3% to 31.3 trillion. rubles.

The profit of the banking sector for the 1st quarter of 2020 amounted to 528 billion rubles.

In detail the situation in the largest banks of the country can learn from the tables below. These data are shown excluding the effects of currency revaluation.

Таблица 1. Banki с максимальным размером кредитного портфеля предприятиям

№ p/p

Bank Name

the Size of the loan portfolio on April 1, 2020, million rubles

the Size of the loan portfolio on January 1, 2020, million rubles

Change, million rubles

Change, %

1

Sberbank of Russia

13 387 021

12 227 910

1 159 111

9

2

WTB

7 150 370

6 967 866

182 504

3

3

Gazprombank

4 234 491

3 849 720

384 771

10

4

RAB

1 981 807

1 881 861

99 946

5

5

credit Bank of Moscow

1 844 468

1 785 107

59 360

3

6

Alfa-Bank

1 830 003

1 626 538

203 465

13

7

the Bank "Otkrytie"

1 001 733

989 821

11 912

1

8

national Bank “trust”

899 266

865 955

33 310

4

9

UniCreditBank

639 069

553 361

85 707

15

10

Raiffeisenbank

545 223

484 405

60 817

13

11

the Bank “Russia’

452 908

405 931

46 976

12

12

, the Bank

363 440

344 217

19 222

6

13

all-Russian Bank of regions

362 645

316 651

45 993

15

14

ROSBANK

340 129

291 482

48 647

17

15

the Bank “St Petersburg”

333 421

301 606

31 814

11

16

Sovcombank

249 579

199 324

50 254

25

17

the Bank "Peresvet"

230 838

225 137

5 700

3

18

Moscow industrial Bank

173 219

161 215

12 003

7

19

Citibank

142 127

110 927

31 199

28

20

MCB

131 457

116 250

15 207

13

Source: data of Bank of Russia and the portal Banki.ru.

As you can see, most of the major banks actively increased in the 1st quarter of 2020 corporate lending. In absolute terms, significantly increased its loan portfolio to companies Sberbank, Gazprombank and Alfa-Bank. In relative terms significantly increased their portfolios of Citibank, Sovcombank, ROSBANK, Raiffeisenbank and UniCredit Bank. Such a significant increase in volumes of portfolios of «daughters» of foreign banks (as indeed of several other major banks) can be partly attributed to the ruble revaluation of issued foreign currency loans.

Recall that the Bank "Peresvet" of the Moscow regional Bank and Moscow industrial Bank are in the process of financial recovery. And NB “trust” became the Bank “bad debts" referred to “trust” of banks the infamous “the Moscow ring”.

Statements PSB, converted to the Bank now to work with the defence industry, are no longer published on the website of the Bank of Russia in full. So now the Bank itself is not included in our rating. However, recent published data on the results of the 1st half of 2019 allows you to confidently attributed to PSB's top 10 banks by volume of loans to enterprises.

Таблица 2. Banki с максимальным размером кредитного портфеля физлицам

№ p/p

Bank Name

the Size of the loan portfolio on April 1, 2020, million rubles

the Size of the loan portfolio on January 1, 2020, million rubles

Change, million rubles

Change, %

1

Sberbank of Russia

7 455 782

7 240 611

215 170

3

2

WTB

3 045 955

2 922 154

123 801

4

3

Alfa-Bank

741 773

666 290

75 482

11

4

Gazprombank

617 279

581 131

36 147

6

5

RAB

465 293

460 925

4 368

1

6

Mail Bank

423 414

412 623

10 791

3

7

the Bank "Otkrytie"

380 870

338 010

42 859

13

8

Tinkoff Bank

376 849

362 435

14 414

4

9

ROSBANK

351 016

339 536

11 479

3

10

Raiffeisenbank

322 522

312 936

9 585

3

11

Sovcombank

296 910

284 627

12 283

4

12

home Credit Bank

210 155

218 244

-8 088

-4

13

UniCreditBank

196 344

190 408

5 936

3

14

the Bank “URALSIB”

161 028

152 002

9 025

6

15

the Bank «Renaissance Credit»

149 024

151 359

-2 335

-2

16

Cetelem Bank

141 465

141 918

-453

0

17

Rusfinansbank

136 325

137 329

-1 003

-1

18

the Bank «Russian Standard»

135 244

134 903

340

0

19

credit Bank of Moscow

130 863

124 246

6 616

5

20

East Bank

117 507

117 024

483

0

Source: data of Bank of Russia and the portal Banki.ru.

А вот по кредитованию физлиц картина другая. В абсолютном выражении сильнее всего нарастили объемы портфелей Сбербанк, WTB и Alfa-Bank. При этом объем кредитного портфеля лидеров рынка – Сбербанка и WTB почти на порядок превышает объемы кредитных портфелей других банков.

However, in relative terms, the majority of participants rating the growth of portfolios was quite small. You can highlight is that of FC «Opening», which intends to capture a significant share of the retail banking market and Alfa-Bank. Most of the other major banks considerably slowed down the rate of increase of portfolios in the comparison with record figures of the 1st quarter of 2019. And home Credit Bank, Renaissance credit and Rusfinansbank slightly reduced the volume of loan portfolios to the public.

Recall that the Bank URALSIB is in the process of financial recovery.

Таблица 3. Banki с максимальным размером просроченной ссудной задолженности в сводном кредитном портфеле

№ p/p

Bank Name

the size of the delay on April 1, 2020, million rubles

the size of the arrears on January 1, 2020, million rubles

Change, million rubles

Change, %

1

national Bank “trust”

641 400

604 419

36 980

6

2

Sberbank of Russia

519 079

473 709

45 370

10

3

WTB

226 954

209 707

17 247

8

4

the Bank "Otkrytie"

217 758

216 021

1 736

1

5

RAB

198 731

192 601

6 129

3

6

Alfa-Bank

137 475

164 751

-27 276

-17

7

PR

132 410

131 081

1 328

1

8

Gazprombank

116 993

106 216

10 776

10

9

Moscow industrial Bank

98 051

91 432

6 619

7

10

BM Bank

92 612

90 786

1 825

2

11

Roskombank

55 090

55 114

-24

0

12

the Bank «Russian Standard»

48 171

46 908

1 263

3

13

credit Bank of Moscow

48 168

46 523

1 645

4

14

Moscow regional Bank

46 869

47 897

-1 028

-2

15

inv

46 860

45 874

985

2

16

the Bank BUILDING.RF

46 787

46 177

609

1

17

Tavrichesky Bank

41 337

39 226

2 110

5

18

the Bank «Revival»

36 210

37 667

-1 456

-4

19

Sovcombank

33 609

32 068

1 541

5

20

Mail Bank

32 788

27 953

4 835

17

Source: data of Bank of Russia and the portal Banki.ru.

The following table shows total arrears to businesses and individuals. As you can see, there was an increase in the amount of delay in most banks – rating. Significantly increase delay Sberbank, Gazprombank and Mail the Bank. And best of all analysis of distressed debt managed to Alfa-Bank.

We note the record results of the “bad Bank debt” – the Bank's “trust”, which assembled the largest portfolio of problem loans in the banking industry. Recall that BM-Bank, Mosoblbank, Investtorgbank, Bank "Peresvet" Bank "Tauris” and Bank URALSIB are in the process of financial recovery.

, Given the deteriorating economic situation, the Bank of Russia expects growth in overdue and problem loans, which will be smoothed due to the restructuring of certain loans under the law of vacation credit or private programs of banks. In the bulk of problem loans, the Bank temporarily allowed banks not to dosdat reserves, expecting that the majority of borrowers will still be able to return to normal debt service.

table 4. The largest banks on volume of funds of enterprises

№ p/p

Bank Name

the equity of enterprises on 1 April 2020, million rubles

the equity of enterprises on January 1, 2020, million rubles

Change, million rubles

Change, %

1

Sberbank of Russia

7 206 100

6 276 860

929 239

15

2

WTB

5 144 713

4 717 127

427 586

9

3

Gazprombank

3 746 138

3 492 481

253 657

7

4

Alfa-Bank

1 565 768

1 419 628

146 140

10

5

RAB

1 296 935

1 097 669

199 265

18

6

credit Bank of Moscow

1 082 869

998 994

83 874

8

7

UniCreditBank

796 837

540 751

256 086

47

8

National Clearinghouse

795 544

627 683

167 860

27

9

the Bank “Russia’

656 447

654 760

1 687

0

10

Raiffeisenbank

567 556

444 728

122 828

28

11

the Bank "Otkrytie"

553 992

612 698

-58 705

-10

12

ROSBANK

513 768

409 776

103 991

25

13

all-Russian Bank of regions

509 478

321 310

188 168

59

14

, the Bank

435 046

395 756

39 289

10

15

Sovcombank

369 723

361 733

7 990

2

16

the Bank «AK bars»

338 768

309 061

29 706

10

17

Citibank

322 035

280 812

41 223

15

18

BM Bank

308 304

310 481

-2 176

-1

19

Surgutneftegazbank

213 938

232 472

-18 534

-8

20

the Bank “URALSIB”

203 607

209 075

-5 467

-3

Source: data of Bank of Russia and the portal Banki.ru.

A significant inflow of funds of enterprises was observed in most of the banks-rating participants. In absolute terms, the record became the all-Russian regional development Bank, UniCredit Bank, Raiffeisenbank, ROSBANK and national clearing centre. The outflow of funds of enterprises occurred in the FC “Opening”, the Surgutneftegazbank, the Bank “URALSIB” and BM Bank.

Note that part of the increase in the volume of funds of enterprises in the 1st quarter of 2020 due to the currency revaluation because after the devaluation of the ruble in the 1st quarter of 2020 balances of deposits and funds on accounts in foreign currency showed a significant increase when calculated in rubles.

table 5. The largest banks on volume of deposits of physical persons

№ p/p

Bank Name

the Size of deposits of physical persons on April 1, 2020, million rubles

the Size of deposits of physical persons on January 1, 2020, million rubles

Change, million rubles

Change, %

1

Sberbank of Russia

13 544 729

13 312 648

232 080

2

2

WTB

4 518 877

4 316 486

202 390

5

3

Gazprombank

1 254 947

1 160 322

94 624

8

4

Alfa-Bank

1 248 012

1 200 455

47 557

4

5

RAB

1 216 107

1 166 347

49 760

4

6

the Bank "Otkrytie"

897 960

885 949

12 011

1

7

Raiffeisenbank

528 562

469 625

58 936

13

8

credit Bank of Moscow

486 552

474 959

11 593

2

9

Sovcombank

434 432

434 579

-147

0

10

Mail Bank

375 310

384 148

-8 838

-2

11

Tinkoff Bank

342 655

336 213

6 441

2

12

ROSBANK

324 416

305 960

18 456

6

13

UniCreditBank

276 687

261 397

15 290

6

14

the Bank “St Petersburg”

241 104

235 353

5 750

2

15

SMP Bank

195 771

208 961

-13 189

-6

16

Moscow Industrial Bank

193 773

195 432

-1 658

-1

17

home Credit Bank

178 660

182 258

-3 597

-2

18

the Bank “URALSIB”

166 161

159 804

6 357

4

19

Ural Bank for reconstruction and development

164 924

166 772

-1 847

-1

20

the Bank «Russian Standard»

159 076

161 427

-2 350

-1

Source: data of Bank of Russia and the portal Banki.ru.

Мы видим, что, несмотря на снижение процентных ставок, большинство участников рейтинга показали прирост портфеля вкладов физлиц. В абсолютном выражении максимальный приток наблюдался в Сбербанке, WTB и Gazprombankе. В относительном выражении хорошо нарастил объем вкладов Raiffeisenbank. Отток наблюдался в Почта банке, СМП банке, Московском индустриальном банке, Хоум Кредит банке, УБРР и банке «Русский стандарт».

Note that part of the growth of deposits in the 1st quarter of 2020 due to the currency revaluation because after the devaluation of the ruble in the 1st quarter of 2020 foreign currency deposits in rubles showed a significant increase. Reduction of deposits increased at the end of March, when people actively made the purchase of goods of daily demand in the event of quarantine, and long-delayed major purchases in anticipation of rising prices.

table 6. The 20 most profitable banks

№ p/p

Bank Name

, Net profit of 1 April 2020, million rubles

Financial result on April 1, 2019, million rubles

Change, million rubles

1

Sberbank of Russia

218 651

218 170

480

2

Alfa-Bank

141 038

44 922

96 116

3

WTB

38 491

50 169

-11 677

4

Tinkoff Bank

12 210

9 168

3 042

5

credit Bank of Moscow

8 403

35 450

-27 046

6

Gazprombank

8 196

17 723

-9 526

7

the Bank “Russia’

7 513

3 943

3 569

8

Moscow regional Bank

6 203

5 171

1 031

9

ROSBANK

5 746

1 844

3 901

10

UniCreditBank

5 184

1 029

4 154

11

BM Bank

4 262

3 557

704

12

Raiffeisenbank

4 260

15 606

-11 345

13

National Clearinghouse

4 149

4 872

-722

14

SMP Bank

3 596

3 743

-146

15

, the Bank

3 421

2 398

1 023

16

RAB

3 150

5 553

-2 403

17

the Bank "Otkrytie"

2 923

18 521

-15 598

18

VUZ-Bank

2 509

1 417

1 091

19

Mail Bank

2 458

1 064

1 393

20

MCB

2 433

3 489

-1 055

Source: data of Bank of Russia and the portal Banki.ru.

To compare how the changed profitability of banks for the 1st quarter of 2020, given the magnitude of financial results for the same period last year. Half of the participants showed a smaller amount of profit in comparison with last year's results. Significantly increased the amount of profit is that of Alfa-Bank. Traditionally, the bulk of the profit of the Russian banking system is formed by the savings Bank.

table 7. The 20 most unprofitable banks

№ p/p

Bank Name

Loss on April 1, 2020. million rubles

Financial result on April 1, 2019., million rubles

Change, million rubles

1

national Bank “trust”

-9 508

4 193

-13 701

2

the Bank “Tsentrokredit»

-7 476

3 265

-10 742

3

Interprombank

-1 909

350

-2 259

4

Rosgosstraha

-1 813

-161

-1 652

5

Swazi-Банк

-690

1 611

-2 301

6

Sevastopol marine Bank

-625

-36

-589

7

the Bank «Zenith»

-510

260

-771

8

Bank

-483

14

-497

9

Rusfinansbank

-481

231

-712

10

ING Bank

-460

3 602

-4 063

11

Credit Europe Bank

-437

1 470

-1 907

12

Modelbank

-415

61

-477

13

Plus Bank

-354

489

-843

14

BBR Bank

-327

-460

133

15

Cetelem Bank

-264

495

-759

16

home Credit Bank

-259

4 747

-5 006

17

es-Bi-ay Bank

-255

-146

-108

18

Morgan Stanley Bank

-203

-62

-140

19

the Bank “Solidarity»

-177

-367

189

20

the Bank “Inkahran»

-149

-31

-117

Source: data of Bank of Russia and the portal Banki.ru.

To compare how the changed results of the banks for the 1st quarter of 2020, given the magnitude of financial results for the same period last year. In terms of economic growth, the results for banks ' profits in the early years is not too revealing. However, during economic crises the banks would not be so easy to make a profit and cover obtained in the beginning of the year large losses. Recall that the part of the banks in the ranking, showed a loss, are in the process of financial recovery.

In General, the Russian banking sector in the 1st quarter of 2020 has slowed the growth of a number of important indicators, as can be seen from the above data of financial statements. The negative trends in the economy have not been reflected in Bank statements for the 1st quarter of 2020 in appreciable amounts.

After twice lifting the key rate by the Central Bank in 2018 there was a slight increase in the cost of funding – interest rates on deposits in rubles and foreign currency, and, accordingly, lending rates raised the majority of large and medium-sized banks. However, in 2019, the Central Bank changed its interest rate policy, and 5 times reduced the key rate, bringing it to 6.25% per annum.

2020 the Bank of Russia has lowered the interest rate to a historically low level of 5.5% per annum. And judging by the promises Elvira Nabiullina, in the 2nd quarter, the key rate may be reduced to 4.5% per annum. This creates totally new working environment for banks. Fallen the absolute amount of interest income will significantly reduce the profit margin and extend in time the process of writing off bad loans.

Due to the reduction of the key rate and the rate on Bank deposits reached historic lows. The average maximum bet top 10 Russian banks by retail deposits in roubles fell at the end of April to 5.4% per annum. On deposits in foreign currency rates are significantly lower and up 0.01%-0,5% per annum. However, during the crisis, deposits with their system of government guarantees are actually no readily available alternatives. But low interest rates, the devaluation of the ruble and the imposition of a tax on large Bank deposits still provoked the outflow of deposits in the month of March, in the first place – the deposits in foreign currency.

The rapid increase in banks volumes of retail lending became one of the most important trends 2019. In the 1st quarter of 2020, the growth of retail lending has slowed down due to previous measures of the Central Bank to limit credit debt of Russians, and also because of more careful consideration by banks of loan applications and the tightening of the risk-based approach.

The lending to corporate borrowers in the 1st quarter of 2020 revived. Companies seek to offset falling revenue due to the introduction of quarantine measures, the devaluation of the ruble and caused by these processes of crisis of the economy.

The liquidity situation in the banking sector deteriorated in the month of March, a structural surplus of liquidity according to the Bank of Russia decreased by 1.5 trillion. rubles to 2.3 trillion. rubles. This is due primarily to the increase in the emission of cash. The Russians were hoarding cash for a period of quarantine and possible financial uncertainty.

The amount of highly liquid foreign exchange assets of the banking system amounted to $53,5 billion, enough to cover 37% of foreign currency deposits and funds of enterprises and 18% of the total liabilities in foreign currency. While large banks still have enough assets to obtain under their mortgage funds in the Bank of Russia.

When this excess liquidity cheap have state-owned banks, large private banks and “daughter” of the foreign banks. The largest banks benefit most from placement of free budget funds of the Ministry of Finance. At the same time, small private banks are sometimes forced to keep a higher stock liquidity to survive the occasional foray clients.

In addition, according to the Central Bank increases the imbalance of assets and liabilities of banks according to the urgency – there is a growth of long-term loans and the high share of deposits up to 1 year. This imbalance would increase as a result of the provision of companies and natural persons credit vacation. To compensate for the adverse effect, the Central Bank introduced long-term refinancing operations of banks for a period of 1 year under the collateral assets.

The cleanup of the banking market in 2020 actually stopped. If 2019 was withdrawn 31 license, and there was a 12 reorganizations in the form of joining to larger banks, for the 1st quarter of 2020 was forcibly withdrawn only 4 licenses from small banks, 14 banks were voluntarily liquidated. It is obvious that the Central Bank is in the midst of the economic crisis will not unless absolutely necessary to tighten banking supervision. This is evidenced by the unprecedented incentives for banks in assessing their troubled assets.

Is increasing concentration of assets in the largest banks. The share of 11 systemically important banks (with their subsidiary credit organizations) together account for more than 70% of banking sector assets, while the share of the top 50 banks account for 93% of assets. In the top-10 on the asset are only 3 Bank not controlled by the government and some sectors of the market state-owned banks occupy a monopoly.

The profit of the Russian banking system for the 1st quarter of 2020 from successful banks were even somewhat higher than in the corresponding period last year. Were profitable Bank 254 of 434. But the bulk of profits are traditionally concentrated in the 3 largest banks.

The head of the Central Bank Elvira Nabiullina at a press conference may 8, 2020 gave the first data about results of work of banks in the month of April – the first month in which the maximum apparent negative economic consequences quarantine. The portfolio of loans to companies rose 1.2 percent, below the March record growth at 2.6%, but higher than the average monthly values for 2019. This reflects the increased demands of companies in financing amid falling cash flow.

Розничный кредитный портфель за апрель сократился на 0,6%. Banki стали более осторожно выдавать кредиты, а россияне на фоне ожидаемого падения доходов не спешат наращивать объем долгов.

In April, the volume of deposits increased by 0.8%, i.e. March, the trend of outflow of deposits (-1%) managed to buck the trend. The amount of funds in the accounts decreased by 1.4%.

Elvira Nabiullina Also spoke about the implementation of Bank support measures of economy on 6 may 2020.

94 thousand filed applications for restructuring of loans from small and medium-sized businesses. The level of approval their banks was 77%. Already restructured loans to small and medium businesses to 343 billion rubles. Among the SMEs filed applications for new loans approved 20%, another 31% are considered, 45% already given a waiver by the banks.

The citizens filed 1.4 million applications for restructuring. Banks reviewed 1.3 million applications granted 741 thousand, or 58% of the submitted applications.

With 210 thousand citizens filed applications for the provision of credit vacation. The highest percentage of their approval banks – on mortgage loans, about 80%. The percentage of approved applications for restructuring on auto loans – only 20%.

According to information from 11 systemically important banks were restructured 1,1 thousand of loans to large businesses, totaling 502 billion.

We must note that significant concessions in accounting for problem loans and losses from investments of own funds of banks in the securities imposed by the Bank of Russia in connection with the beginning of a new economic crisis, beneficially influence the reporting banks. In addition, January and February 2020 was for Russian banks is actually quite good. Serious problems of the banks and the country's economy began only in mid-March and 1st quarter of 2020 they had not yet seriously impair the financial performance of both banks and most businesses.

So do not be deluded shown in the reporting banks good profit and a low share of delay. Real share distressed assets, at least we will be able to assess only after 2020.

At the same time, banks have approached the crisis in much better shape than in 2014. Removal by the Central Bank with the weak market players and the increase of requirements to quality of work of other banks still have borne fruit. In addition, if necessary, the government will provide assistance to the largest Russian banks, which are now concentrated the bulk of banking sector assets.

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Source: finversia.ru

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