Page 60 - RUSRptOct18

8.1 Bank sector overview
The profit of Russian banks declined by almost 10% in the first eight months of 2018 . Russian banks received a profit of RUB901bn ($13.2bn) according to Central Bank of Russia (CBR), down 9.6% y/y.
The data for August suggests that Sberbank was again the main driving force in both retail and corporate lending. Analysts expect further solid growth from the sector and bank loan portfolio to be supported by seasonal trends. Meanwhile, the moderating growth of customer accounts means that some banks are increasing deposit rates. Still, analysts do not expect visible pressure on Sberbank’s NIM in the near term as they expect a positive impact from higher asset yields as interest rates start going up.
The financial performance of credit institutions was influenced by the performance of banks that are undergoing financial recovery through the Fund for the Consolidation of the Banking Sector, the regulator said, Vedomosti reported.
"Without taking them into account, the profit of the banking sector for January-August 2018 amounted to RUB1.2 trillion,” the CBR said in a statement.
The profits of the banking sector were also affected by "the costs of ensuring the work of credit institutions" that is worth RUB918bn the bank said.
Over the same period, Russian banks issued more loans. Taking into account the currency revaluation, the level of lending to legal entities increased by 8.3% to RUB32.684 trillion and retail loans were up by 14.1% to RUB13.893 trillion. Without taking into account the exchange rate, corporate lending for eight months of 2018 increased by 3.3%, while retail loans were up by 14.0%.
"The balance of reserves for possible losses increased in August 2018 by 1.7% to RUB7.6 trillion, and for eight months the increase was 11.1%. In 2017, the balances of the reserves for potential losses grew more restrained: in August 2017, the increase of 1.0% to RUB5.8 trillion, and in January-August 2017 by 6.8%” the CBR said.
60 RUSSIA Country Report October 2018 www.intellinews.com