Page 92 - RusRPTMar21

implemented an advanced risk weighting approach for certain asset classes. As a result, the sector average risk-weighted assets density decreased to 92% at end-2020 from 98% at end-2019. The sector average core Tier 1 ratio was 10.4%, Tier 1 was 11.4% and total capital ratio 14% at end-2020.
We expect sector capital ratios to be stable in 2021 as banks should be able to absorb higher impairment charges through pre-impairment profit, and lending growth will be close to internal capital generation (net profit less dividends to average equity).
8.1.7 Banks specific issues
In January 2021, the number of banks did not change and amounted to 406 as of January 31, 2021. The number of banks decreased to 365 (from 366) due to the reorganization of one bank into a non-bank credit organization (NPO). The share of 12 systemically important banks (SZKOs) in the assets of the banking sector, including their subsidiaries (another 17), is more than 75%. The share of other large credit institutions from the top 100 is about 20% of assets sectors, including 5.5% - large NPOs (including the National Clearing Center).
The Russian government will allocate RUB7.8bn in 2021 on a new cheap lending program for 75,000 entrepreneurs, Prime Minister Mikhail Mishustin said at a government meeting on February 24. “The president approved a decision to launch a new easy-term lending program for recovery of entrepreneurship. It will be called the FOT 3.0 program. This year we will allocate about RUB7.8bn to its implementation from the government’s reserve fund,” Mishustin said. He said that President Vladimir Putin a 3% credit program for the companies from the industries that were hurt by the coronavirus pandemic, including public catering companies and restaurants, as well as sports and culture companies.
The CBR met leading Russian banks on February 18 to talk about plans fro 2021.
NIM performance. The CBR expects a further decline in sector NIM of 20- 30bp y/y amid pressure from the low interest rate environment. This estimate is below SBER’s (conservative, in our view) outlook for a 50bp y/y decrease in NIM.
We also see a further decline in TCS’s NIM, balanced by an increase in net F&C income amid further growth in brokerage and other non-core businesses, as well as the launch of Tinkoff Kassa.
Subsidised mortgage programmes. The CBR is going to reassess the criteria of other long-term subsidised mortgage programmes in order to make them more targeted and supportive for construction
92 RUSSIA Country Report March 2021 www.intellinews.com