Page 97 - RusRPTApr21

RANEPA, during 2020 the population accumulated RUB2.5 trillion in accounts and deposits in banks. Another RUB2.7 trillion went to save in cash, while the increase in the volume of cash was the highest since 2013.
Experts unanimously point out that the growth of Russians' savings is by no means associated with an increase in well-being, but is due to the fact that during a period of uncertainty caused by the coronavirus pandemic and accelerating inflation, people prefer not to spend, but to form a financial safety cushion.
On average, in 2020, Russians spent RUB26,900 on goods and services per month, analysts of the international audit and consulting network FinExpertiza calculated. This is 9% lower than in 2019, taking into account inflation, the biggest decline since 2015.
On average, Russians have reduced their spending by RUB1,680 rubles per month, or RUB20,200 per year.
The total amount of savings exceeded RUB2.77 trillion rubles. At the same time, residents of more prosperous regions could afford to cut their expenses, such as Moscow, St. Petersburg, Yakutia, Sverdlovsk and Kaliningrad regions, Stavropol Territory. The less well-to-do did not have such an opportunity. As a result, according to analysts' estimates, the real disposable income of the population in 2020 decreased by 3.5%.
The State Duma has received a draft law empowering the CBR to limit consumer lending by individual banks and microfinance organisations on March 25.
The Duma's committees are to discuss the draft before voting on it. In a nutshell, in our view the new law is not meaningful for the banks under our coverage as the CBR would effectively get the right to impose individual risk weights for banks and microfinance organisations, hence cooling down potential aggressive players, especially in the high PTI pockets of the market.
At the moment, the CBR regulates consumer loan growth via risk weights. Raising them in 4Q19 slowed the portfolio increase, while reducing additional risk weights for new loans moderately, and cancelling them for some legacy loans, was a support measure for consumer lending in 3Q20.
Starting 1 July 2021, the CBR might further cut risk weights for some legacy loans, but this is not yet settled. Effectively, the CBR would be raising the entry barriers into consumer lending, thus structurally strengthening the oligopolistic market, which is currently forming and lowering the through-the-cycle CoR due to the low change of disruptive competition that worsens the unit economics of retail lending.
“In the case of Tinkoff Bank (the most exposed bank of the major banks), its loan mix has been continuously evolving in favour of secured lending (home equity, car loans and, potentially, mortgages
97 RUSSIA Country Report April 2021 www.intellinews.com