Page 56 - RusRPTJuly18

8.1.3 Deposits
Non-state customer funding increased by RUB425bn (0.9%) in 1Q18,
while net of a RUB345bn retail funding outflow from Sberbank in January (largely a reversal of December’s spike mostly related to pension prepayments for January), the increase would have been RUB770bn (1.6%). We expect deposits to grow by 5%-7% in 2018.
Adjusting for ruble depreciation, customer funding (excluding deposits from state entities) increased by RUB226bn (0.5%) in 3M18, of, which RUB55bn (0.2%) was corporate accounts and RUB171bn (0.7%) retail deposits. The largest inflows of corporate accounts was at Gazprombank (RUB273bn, 9%, compensating a RUB140bn outflow in February), Unicredit (RUB87bn, 15%) and Citibank (RUB62bn, 23%), while considerable outflows were reported by Rusag (RUB117bn, 10%, offset by deposits attracted from Minfin and regional budgets), VBRR (RUB36bn, 11%, largely a reversal of a RUB42bn inflow in February), Rosbank (RUB41bn, 11%) and ING Bank (RUB48bn, 35%, viewed by Fitch as normal volatility for the bank's business model). Retail deposits grew evenly across the sector.
8.1.4 NPLs
Non-performing loans (NPLs, regulatory doubtful and loss categories) increased to 10.6% of sector loans at end-2M18 (latest available) from 10% at end-2017, but were 92% reserved. Asset quality should be broadly stable in 2018, with pre-impairment profit (3%-4% of loans) sufficient to cover new problems (2%-3% of loans). Increasing retail loan growth is of concern, as it may result in overheating in the medium term.
8.1.5 NIMs & CARs
RUSSIA Country Report July 2018 www.intellinews.com
Excluding banks under CBR rehabilitation with a low average net interest margin (NIM) of 1.7%, the sector average NIM was a healthy 4.4% in 1Q18,