Page 96 - RusRPTOct22

(CBR) Dmitry Tulin said in an interview with RBC business portal.
As followed by bne IntelliNews, largest Russian banks are heavily sanctioned, being put on the SDN list by the US and cut off from SWIFT by the EU.
In January 2022, prior to Russia’s military invasion of Ukraine, the banking sector was still in black showing a profit of RUB164bn. The loss posted for 1H22 is the largest on record since 2012, but Tulin argued that it was small given the unprecedented sanction context.
He estimated the capital strength reserve of the banking system stands at RUB7 trillion and there was no need to inject capital systemically. Among the 13 largest banks, "the ratio of profitable to unprofitable is 60$ to 40%," according to the CBR official who sees the 2017 scenario of a broad-based and costly bail-out campaign as unlikely.
"We do not expect a repeat of the events of 2014-2017, when banking crashes occurred due to problems accumulated in the banking sector over many previous years, long before 2014. The events of 2014 only exacerbated these long-standing problems and brought them to the surface," Tulin told RBC.
A maximum of one or two banks might require state support by the end of 2022, he estimated, without specifying, and added that the CBR planned to “inform the government about our preliminary conclusions on this matter as early as in September".
Russian insurance companies posted an aggregate loss of RUB1.4bn ($23bn) in 2Q22 versus RUB70bn net profit for the same quarter of 2021, Vedomosti daily reported citing the data from the Central Bank of Russia (CBR). This was the first quarterly loss of the insurance industry on record. Still, the insurance sector managed to close 1H22 overall in the black, posting a profit of RUB46bn, albeit plunging by 62% year on year. The main losses came from RUB131bn losses on investment activities due to the fallout from Russia’s military invasion of Ukraine. Life insurers accounted for almost 75% of all investment losses in 2Q22, as investment in foreign assets was common in life insurance investment plans.
96 RUSSIA Country Report October 2022 www.intellinews.com