Page 95 - bneIntelliNews monthly country report Russia May 2024

The loan portfolio has grown by 1.1% since the beginning of the year, while customer funds – by 5.1%. The net interest margin amounted to 5.9% (5.8% in 1Q23), which ensured an increase in net interest income by 24% YoY to RUB 700 billion. Net commission income in 1Q24 increased by 8% YoY to RUB 184 billion. Cost of risk in 1Q24 was 0.5% (1.1% in 1Q23), keeping provisioning costs moderate. Taking into account the restraining dynamics of other income and the growth of operating expenses by 25% YoY, profit in 1Q24 amounted to RUB 397 billion, which corresponds to a profitability of 24%. The group's capital adequacy ratio (H20.0) increased by 20 bp. since the beginning of the year to 13.7%.
Sberbank also updated its macro forecast, which implies GDP growth in 2024 of 2.8%, as well as inflation and the key rate at the end of the year at 4–5% and 13%. In the sector as a whole, the bank expects growth in the corporate and retail loan portfolio by 12–15% and 9–11%, as well as growth in funds from corporate and retail clients by 2–4% and 24–26%, respectively. Sberbank is updating the forecast regarding its financial performance for 1H24. The current forecast implies net interest margin and profitability of 5.7% and 22.0% for 2024.
8.1.8 Bank news
Four major Chinese banks have stopped accepting yuan from Russia
Among them - ICBC, China Citic Bank, Industrial Bank (they occupy the 1st, 10th and 12th places by capitalisation, respectively) Industrial Bank and Bank of Taizhou. Financial organisations took such a decision due to fears of possible secondary sanctions by the United States.
The situation with payments from Russia to China deteriorated sharply in late March when about 80% of attempted payments were rejected. The Bank of China also introduced restrictions, but it handles only a small share of transactions from Russia.
Major Chinese banks are limiting payments for transactions with Russia, fearing US sanctions, Reuters reported on April 29, citing undisclosed trading and banking sources. Chinese banks have stepped up scrutiny of Russia-related transactions since March or stopped doing business with Russia at all to avoid US sanctions, the sources told Reuters. "Transactions between China and Russia will increasingly go through underground channels. But these methods carry significant risks," said the head of a trade body in a southeastern province that represents Chinese businesses with Russian interests. Some Chinese companies are turning to small banks at the border and underground financing channels such as money brokers, including banned cryptocurrencies, as the country's big banks pull back from financing Russia-related transactions, Reuters wrote. Others entirely left the Russian
95 RUSSIA Country Report May 2024 www.intellinews.com