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surveyed by the daily believe that deposit rates will remain stable in tune with the cautious monetary policy of the CBR up until at least second quarter of 2019.
CBR to tighten rules on consumer loans, slow borrowing The Central Bank of Russia (CBR) is planning to introduce more rules to make consumer loans less profitable for banks and slow the growth of the business from September 1, Vedomosti reported. The CBR has already acted several times to prudentially cool consumer lending to avoid a credit bubble and has been especially tough on unsecured credits, introducing expensive prudential reserve rules to limit the growth of this product. Under the latest changes if a bank’s rate on a loan is over 10% per year then a bank will get a higher risk ratios for that loan that will further increase the amount of prudential capital banks will have to hold in reserve in case the loans go bad. And that means all consumer lending will be affected as there are no loans on the market at less than 10% per annum, although rates are falling steadily. Currently the regulator limits the ratio of capital to assets to 8%, but assets are weighed against risk. The higher the risk, the lower the value of the capital adequacy ratio. So increasing the formula used to calculate the risk of consumer loans will reduce a bank’s capital adequacy ratio and force it to take more capital out of circulation as a reserve – capital that cannot be lent of pledged and so earns no profits. Now the banks take into account the full value of 10-15% per annum with a coefficient of 100%. Since September, the ratio for such loans will grow to 130%, according to the CBR’s new rules posted on its website on July 10. The CBR already expressed its alarm at the pace of consumer loan growth in May. In spring growth was 17.8% per month (in annual terms), the regulator said, while incomes of the population are growing more slowly: their growth in January-May 2018 to the previous year is 5% (in nominal terms), according to the CBR. The mismatch means the indebtedness of the population is rising and average debt has already gone from one month’s average salary to over two.
8.1.8 Bank news
Russia's largest bank Sberbank continued to post strong results in June and the second quarter of 2018, reporting 27% year-on-year earnings growth to RUB202bn ($3.2bn) for the quarter under Russian Accounting Standards (RAS), making a return on equity of 23%. VTBC said that the RAS data supports its FY18 forecast earnings of RUB870bn ($13.7bn). "As the bank shows more than 20% ROE under RAS, and given the potential [Turkish] Denizbank sale , which might have a more than 100bp positive effect on Sberbank’s capital, we reiterate our view that the dividend payout ratio can be increased in 2018 to 50%, which implies a 9% dividend yield for ords and 10% for prefs," VTB argues.
TCS Group release 5M18 RAS results that confirm that TCS remains on the growth path with strong loan growth , and retail funds are also high with R169bn as of May 2018. Net profit generation supports capital levels with N1.1 up to 11.59% in May from 10.15% the previous month. TCS’ share price is currently supported by the buyback from main shareholder Oleg Tinkov. About 15mn GDRs were bought out of 20mn GDRs announced.
Russia's Tinkoff Credit Systems (TCS) banking group is considering acquiring the country's leading online ticketing service Kassir.ru, RBC
44 RUSSIA Country Report August 2018 www.intellinews.com