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loans which are half as much at around RUB16 trillion, so these loans are amply covered by deposits. But the worry is that retail loans are expanding very fast at around 25% a year and the CBR is worried a consumer credit bubble is forming.
8.1.1 Earnings
Russian banking sector aggregate net profit was up 60% year-on-year to RUB867bn ($13.8bn) in January-May 2019, according to the data released by the Central Bank of Russia (CBR), versus the RUB527bn posted for the same period of last year.
According to previous reports, in January-April 2019 Russian banks increased profits by 39.7% to RUB750bn, which makes the sector profit for May alone RUB117bn, which was below the RUB163bn posted for April. That’s a ROE 16%, with 5mo19 earnings up 64.5% y/y and YTD ROE of 23.7%.
However, the cumulative profits this year are still running ahead of any year in the last five when the economic crisis hurt the banking sector badly. The CBR previously said that profitable credit organisations dominate the banking sector.
61 RUSSIA Country Report July 2019 www.intellinews.com