Page 76 - RusRPTMay20

caused a systemic banking crisis and the surviving banks rushed into the repo market as the interbank market came to halt. In all Russian banks raised a maximum of RUB784bn ($10.6bn) on the repo market on August 30 and borrowed heavily from the mechanism for a month starting in the middle of July and lasting to the middle of September. Eventually the CBR stepped in and nationalised the banks, restoring confidence in the process. In this episode the bank raised even more, with repo transiations rising to their highest level in the last three years to a peak of RUB886bn ($12bn) after the value of the ruble crashed on the first day of trading following​ ​OPEC+ production cut deal collapse on March 6​. The fall of the ruble was a nasty shock but the fears quickly evaporated. Repo transactions were elevate at over RUB750bn for only four days until March 6 and by the end of that week they had fallen away entire to normal levels. The short lived nature of the spike in repo transactions and the speed at which they fell back to next to nothing is a testament to the fundamentally solid nature of the Russian banking sector after some seven years of reforms carried out since CBR governor Elvira Nabiullina took over in 2013.
Russian insurance industry is expected to lose over 25% in premiums in 2020 ​due to the coronavirus (COVID-19) epidemic, according to the study of Expert RA credit rating agency cited by RBC business portal. The growth of 6-8% expected previously is seen as unattainable for the insurers under any scenario. The non-mandatory insurance segments are expected to be the worst hit. In 2019 the market remained flat at RUB1.48 trillion of total underwritten premiums. Under the positive scenario of short lockdown measures the market could see the recovery already in 2Q20, but the decline would nevertheless make 17%, Expert RA estimates. The decline would mostly be due to lower crediting activity, as banks are main selling points of new products for insurers, along with overall decline in purchasing power and disposable income. The premiums in accident and health insurance, private property insurance and life insurance are expected to decline by 20-25% under this scenario. Under the negative scenario of prolonged lockdown measures, the market could decline by 27% and roll back to the levels seen in post-Crimea 2015. The non-mandatory insurance segments are expected to decline by 35-40%.
76​ RUSSIA Country Report​ May 2020 ​ ​www.intellinews.com