Page 64 - RUSRptApr17

8.0 Financial & capital markets
Russia - Bank lead indicators 2010 2011 2012 2013 2014 2015 2016
Total bank loans (LC bn)
18,410 23,634 28,239 33,272 41,899 57,154 55,479
Total bank deposits (LC bn)
21,081 26,082 30,120 34,931 43,814 49,545 49,412
NPLs (% loans)
4.68 3.95 3.7 3.46 3.82 5.33 6.86
Banks: NPL ratio Retail (%)
6.91 5.24 4.05 4.42 5.89 8.09
Bank deposits (% GDP)
45.52 43.69 45 49.16 56.25 64.24
Bank loans (% GDP)
39.2 39 41.4 45.7 52.5 57.4
Bank capital to assets ratio
12.84 11.92 11.94 11.54 8.54 8.92 9.35
CAR: bank capital to risk-weighted assets
18.1 14.7 13.7 13.5 12.5 12.7 13.1
Total bank assets (LC bn)
33,805 41,628 49,510 57,423 77,653 83,000
Banks: Loans/deposits (%)
87.33 90.61 93.75 95.25 95.63 86.93
Banks: ROAE (%)
12.5 17.6 18.2 15.2 7.9 2.3
source: CBR
The cost of closing down weak banks has lead to a change in regulation and how banks will be restructured . As a result of new laws Russia should only have 160 big banks within about two years.
The weeding out of weak players in the banking sector has meant that the
amount of support funds needed by Russia's Deposit Insurance Agency (DIA) has grown continuously as the DIA has received an increasing number of deposit insurance claims for failed banks, and has dealt with the costs of terminating or restructuring sick banks.
Since the end of 2015, the DIA has largely relied on Central Bank of Russia funding to cover its liabilities . In 2016, CBR loans covered about 70% of the DIA's RUB660bn (about €9bn) in expenditures. The Duma approved a bill that will shift the responsibility for dealing with troubled banks to the CBR. The change is hoped to improve the effectiveness of bank restructurings and slow the pace of rising costs.
At the same time, the Duma approved a law on changes in bank licensing. From the start of 2018, banks will have either general or basic operating licences. A basic licence grants the right to engage in limited banking activities, and reduces the supervisory burden.
The minimum capital requirement is RUB300mn for a basic licence and RUB1bn for a general licence . Banks operating on a basic licence are believed to focus on regional banking and financing small and medium-sized firms. Banks with equity exceeding RUB3bn must have a general licence and
64 RUSSIA Country Report April 2017 www.intellinews.com