Page 65 - RPTRusFeb17

Banks in EM in general had a terrible 2017, b ut green shoots of recovery are already visible in Russia and should be followed by Ukraine in 2017 with Belarus bring up the rear.
8.1 Bank sector overview
The combined assets of Russian banks will grow 2% in 2017 to almost RUB81.95 trillion mainly due to retail loans, according to the Russian Analytical Credit Rating Agency (ACRA). Mortgage will become the major growth driver, with all the retail segments expected to increase due to a low base effect and the impact from delayed demand.
The volume in Russia in January 2017 mortgage loans grew by 18% compared to the same period of the previous year and amounted to RUB73bn ($1.2bn), according to Housing Mortgage Agency. "Concerns about the fall of the mortgage market after the completion of the program of state support were groundless," - noted in the agency.
Corporate and retail loans declined 0.3% MoM in January and 0.4% MoM,
respectively. The lacklustre performance was driven by both seasonal factors and, for the corporate portfolio, by the stronger RUB (+0.8%). Seasonal factors might also have contributed to the deterioration in asset quality, as overdue amounts grew 2.9% MoM in the corporate segment and 1.9% in the retail segment.
Retail deposits declined 0.8% MoM (again, in line with seasonal trends), while corporate accounts increased 2.7% MoM. The latter allowed banks to reduce CBR funding 28.5% MoM.
Profit was down 19% MoM but more than tripled YoY, reaching RUB 114bn.
65 RUSSIA Country Report February 2017 www.intellinews.com