Page 80 - RusRPTFeb21

8.0​ Financial & capital markets 8.1​ Bank sector overview
December rounded off a challenging year for the Russian banking sector​, which was faced with the effects of the Covid-related economic slowdown. As for the balance sheet, total sector assets rose 17% y/y (13% adjusted for currency moves).
On the funding side, corporate deposits rose 16% in FX-adjusted terms as corporates conserved cash, while retail deposits were up just 4% y/y (with the growth pretty much all coming in the annual seasonal December growth) compared to almost 10% growth in 2019, as retail savers balked at falling deposit rates and channeled savings into brokerage accounts.
On the assets side, there was a striking increase in debt securities holdings on the back of R5.3 trillion of OFZ issuance in 2020, 80% of, which was taken up by banks. Corporate loans, meanwhile, rose by 10% y/y adjusted for currency moves, in part supported by government guarantees and lending programs, while retail loans were up a strong 14%, driven by mortgages, which increased by almost 25% in 2020, driven by the 6.5% interest rate from the state mortgage support program (which has issued over R1 trillion in new mortgage loans since the program was launched).
The CBR also commented that residential real estate prices increased by 15% in 2020, well above inflation, and there is a keen debate about the terms of any potential extension to the state mortgage support program (such as limiting the regions, which will participate after July 2021).
Consumer loans were up a much more modest 9% in 2020 (compared to 21% in 2019) as banks reduced risk exposure to this segment and as demand eased in the slowing economy.
8.1.1​ Earnings
Russian banks made profits of RUB1.6 trillion ($21bn) in 2020,
versus profits of RUB1.7 trillion a year earlier, the central bank said on Thursday.
Banking sector profit rose to RUB159bn in December, up from RUB149bn in November, the central bank said.
80 ​RUSSIA Country Report​ February 2021 ​ ​www.intellinews.com