Page 17 - RusRPTNov18

2.9 Russian corporate profits, business and consumer confidence
The net profit of Russian non-financial corporations is up by half in the first half of this year thanks to higher than expected oil prices, according to new report by HSE’s Center for Development.
The report found that in January-July of 2018 higher oil prices have made Russia's oil and gas firms more competitive and more profitable, pushing up demand for relevant products and services, BMB reports. However, other sectors lag behind considerably, particularly exporting industries that are unable to take advantage of a weaker ruble because of tariff barriers.
Banks are making more thanks to rising debt levels among Russians amid weak domestic demand conditions. The bank sector has already earned over RUB1 trillion in total over the first nine months of this year and RUB200bn in September alone, according to Central Bank of Russia (CBR), which is well ahead of previous years and a reversal in the crash in earnings in September 2017 when a mini-bank crisis hit as the so-called Garden Ring banks started to go bust.
Oil prices over the first quarter of this year averaged about $65 rising to $75 in the second quarter. Brent futures were trading at $79 at the time of writing in mid-October and have averaged $75 so far this month, but the price of a barrel has traded over $80 on occasion during the month.
According to Rosstat cumulative corporate profit this year has reached RUB7.6 trillion ($116bn), which is well ahead of the RUB5.6 trillion for the same month a year earlier. On a month-on-month basis profits in July were up to RUB1.2 trillion in July, which is also double as much as in the same month a year earlier but less than the peak RUB1.4 trillion Russian firms earned in June this year.
17 RUSSIA Country Report November 2018 www.intellinews.com