Page 78 - RusRPTAug23

8.1.4 NPLs
Data on the percentage of problem loans for June will be available after the publication of this current material. However, it is not expected to see a significant deterioration in the indicators, as the balance sheet data shows only a slight increase in overdue debt for retail lending in June (+0.1%, or +1.7bn rubles) and a decrease in corporate lending (-1.2%, or -37bn rubles).
In May, despite the active growth of loan portfolios, the proportion of problem loans slightly decreased. In the corporate portfolio, it went down to 6.2% from 6.3%, in unsecured consumer loans, it decreased to 8.6% from 8.7%, and in mortgages, it remained at 0.6%.
The volume of loan restructuring in May nearly halved compared to April, dropping to 233bn rubles (less than 1% of the loan portfolio) from 410bn rubles. This is even below the average monthly level in 2021 (320bn rubles). In the medium term, the risks associated with these restructured loans are moderate, with about half of the restructuring attributed to major housing developers, mainly due to an increase in the classification of construction projects. Other restructuring occurred in the oil and gas and fuel and energy companies.
As of the beginning of June, problem corporate loans were covered by individual reserves at 76% and general reserves at 115% (compared to 75% and 114% at the beginning of May). For retail loans, the coverage was at 91% and 130%, respectively (compared to 91% and 128% at the beginning of May). These figures indicate that banks have set aside sufficient reserves to manage potential risks associated with problem loans.
8.1.5 Liquidity, NIMs & CARs
LIQUIDITY: The reserve of ruble liquidity, which includes cash, claims on the Bank of Russia (A category), and unencumbered marketable assets, saw a slight increase of 42bn rubles (+0.2%). Within the structure of liquid assets, there was growth in balances held at the Bank of Russia (+0.3 trillion rubles), while unencumbered marketable assets decreased by 0.2 trillion rubles.
The overall volume of ruble liquid assets amounted to approximately 17.4 trillion rubles. This level is considered adequate, providing coverage for 22% of customer funds in rubles or 49% of funds held by individuals. An additional 9.4 trillion rubles (12% of customer funds) can be raised by banks through collateralizing non-marketable assets with the Bank of Russia. Thus, available sources of ruble liquidity cover around 35% of customer funds in rubles.
The distribution of ruble liquidity reserves across sectors is uneven, but the money market helps mitigate some of these risks. For instance, interbank lending has increased by 1.2 trillion rubles (+10.3%) since the beginning of the year, providing banks with additional funding options.
78 RUSSIA Country Report August 2023 www.intellinews.com