Page 92 - bneIntelliNews monthly country report Russia May 2024

8.1.4 NPLs
February Data Indicates Slight Decrease in Problematic Corporate Loans
While data for March will be available after the publication of this material, February's figures reveal a marginal decrease in the share of problematic corporate loans, down by 0.1 percentage points to 5.2%. Retail non-performing loans, however, remained steady at 4.3%. For more detailed information on February's data, please refer to our previous material.
8.1.5 Liquidity, NIMs & CARs
Foreign Currency Liquidity Reserve Increases
The foreign currency liquidity reserve, in dollar equivalent, has increased by $5.6 billion, reaching $47.4 billion from $41.8 billion.
Client fund coverage has also risen to approximately 50% from 44%, while coverage of foreign currency obligations has increased to 26% from 24%. The level of foreign currency liquidity remains comfortable considering the existing regulatory measures in place.
Despite a profit of 270 billion rubles, the sector's capital increased by only 159 billion rubles, reaching 14.8 trillion rubles. This is primarily attributed to negative revaluation of securities through other comprehensive income (-76 billion rubles due to continued rise in long-term bond yields – particularly, OFZ yields increased by 50–90 basis points). Additionally, changes in retained earnings from previous years (-49 billion rubles) influenced the capital, mainly due to past period losses and dividend payments. Moreover, perpetual subordinated instruments were negatively revalued through the capital.
According to preliminary data, in March, the Tier 1 capital adequacy ratio (N1.0) slightly decreased by 0.1 percentage points to 12.1%, due to faster growth in risk-weighted assets (+1.7%) compared to regulatory capital (+0.9%).
The increase in risk-weighted assets is attributed to expanded lending and increased macro-additions (+11% in a month), primarily for consumer loans.
Capital reserves (above regulatory requirements) remained unchanged in March at 7.5 trillion rubles.
Investments in Debt Securities Decline, Partially Offset by Purchase of New OFZ Issues
The volume of investments in debt securities decreased by 0.2 trillion rubles (-0.8%), attributed in part to the restructuring of certain deals, such as the replacement of corporate bonds with loans, and partial sales of OFZs amounting to approximately 60 billion rubles. Despite this, investments in
92 RUSSIA Country Report May 2024 www.intellinews.com