© RIA Novosti, Ruslan Krivobok
RIA Rating – 27 Mar. The Russian banking sector in February was characterized by relatively high growth rates of assets, which was due to currency revaluation. According to the Bank of Russia, net assets for the month rose in nominal terms by 1.5%, while real growth amounted to only 0.3%. It is worth noting that the dynamics of assets in February were significantly better than the same period of the previous year, which in nominal terms, the assets are not changed, but real growth was only 0.1%. The nominal asset growth rate in February 2020 was the best for the last 6 months, but the result in real terms over the same time interval was only four. According to experts RIA Rating, the nominal dynamics of assets in the short statistics can show significant growth, due to several factors. First, the weakening of the ruble the population makes large purchases including loans. Second, the currency revaluation will continue to make a positive contribution to growth.
In General, a rolling 12-month stretch ending March 1, 2020, assets of banks grew by 6.4% in nominal terms and 5.9% in real terms. For comparison, a year earlier, the increase in real terms on a 12 month rolling segment was much more – 7.9 per cent. The decline in real growth on the previous year largely associated with the slowdown in the growth of lending to legal entities.
The dynamics of lending to the economy in February was quite weak. The volume of loans to economy rose 1% in nominal terms and in real terms, the increase was minimal – 0,02%. It is worth noting that the real growth rate of lending to the economy did not fall below 0.4% of the whole 2019. Thus, the real monthly dynamics of growth of lending to the economy, though improved from the previous month, but the rate of growth in 2020 continue to be very weak. A rolling 12 month period (1 March 2020) lending to the economy increased in real terms by 7.1%. For comparison, on March 1, 2019 (12 months) the growth of lending to the economy stood at 11.5%. The decline in real growth rates are largely associated with the slowdown in corporate lending, and less lending.
The main component of lending to the economy – corporate lending in February was characterized by a significant decline in real terms. In particular, the amount of indebtedness of legal entities in real terms declined 0.6%, the fourth decline in the past 12 months. The rate of decline of corporate lending in February 2019 was the biggest since June 2018. In nominal terms, corporate lending in February was characterized by the growth – the +0.9%. Thus, the currency revaluation to the beginning of 2020 is quite strongly influenced the dynamics of corporate lending, which is not surprising as 25% of all loans to legal entities denominated in foreign currency. Loans for legal entities on a sliding 12-month interval also decreased significantly. In particular, if on March 1, 2019, real growth in corporate lending was 6.2%, on the same date in 2020, the increase slowed to 2.1%.
In turn retail lending in February showed a fairly high growth rate. According to the Bank of Russia, the volume of consumer credits in February grew by 1.2% against the growth by 0.8% and 1% in the previous two months (in January and December respectively). Thus, in February interrupted the trend of recent months, when consumer credit has slowed. On a sliding 12 month period, which ended March 1, retail lending in real terms increased by 17.9% versus 20.7 per cent and 23.9 per cent on October 1 and March 1, 2019.
Passive base of the Russian banking sector in February was characterized by the growth of household deposits and funds on accounts of legal entities. the Volume of funds on accounts of legal entities and deposits in February 2020, in real terms, grew by 1.1% and 0.9%, respectively, which is slightly below the result for the same period in 2019 (+1.2% and +1.6 per cent). Likely to situation with coronaviruses in the short term will substantially affect the dynamics of the liabilities.
the Profit of the Russian banking sector in February declined markedly relative to the previous month, but still is at a good level. According to the Bank of Russia, banks in the past month earned 170 billion rubles, against 223 billion in January. The amount of profit earned by banks in February was about average for the last two years. Overall, the Russian banking sector for the 12 months as of March 1, managed to earn of 1.99 trillion rubles, which is more than 20% more than the same date in 2019. It is worth noting that in the coming months, the profit of the banking sector may significantly decline, which will be connected with coronavirus pandemic and the fall of the stock market.
The situation with revocation of banking licenses in February-March was very calm. So, in less than two months was not revoked any licenses and only one Bank was liquidated. It is worth noting that the last time such a long lull in the reviews of the licenses were far in 2013. In the beginning of the year was forcibly withdrawn only 4 of the license of banks and non-Bank credit institutions that is also quite a small number.
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