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8.1 Bank sector overview
The Russian banking sector posted RUB70bn ($1bn) in June 2020, with profit for 2Q20 overall dropping 5-fold year on year to RUB103bn, according to the banking sector data from the Central Bank of Russia (CBR). The regulator estimated that 2Q20 saw a 9.5-10% GDP contraction.
RBC business portal reminds that a comparable drop in net profit was seen in 2017 during the massive banking sector clean-up waged by the CBR.
As reported by bne IntelliNews, Russia's largest banks are coping better with the coronavirus (COVID-19) crisis as they are supported by state-discounted mortgage issuance and are less reliant on consumer credit requirements.
In June the number of profitable banks in Russia stood at 245, or 63% of the total bank count, down by 9 percentage points. Profitable banks account for 67% of all banking sector assets.
The CBR believes that the sector is unlikely to deteriorate considerably in 3Q20 and 4Q20, all things being equal and the COVID-19 pandemic not worsening. Analysts surveyed by RBC believe that banking profits would indeed recover, but that would require a revival of consumer activity, which in turn will be held back by a drop in incomes.
62 RUSSIA Country Report August 2020 www.intellinews.com
