Page 162 - RusRPTAug24

In the corporate lending sector, the share of problem loans slightly decreased by 0.05 percentage points to 5.0%, attributed to the overall growth of the loan portfolio. As of early June, these loans were covered by individual reserves at 76% and by total reserves at 121%, unchanged and slightly down from 76% and 122%, respectively, at the beginning of May.
The consistent coverage ratios indicate a stable risk management environment, despite ongoing economic challenges.
In the first half of the year, banks put up for sale a record volume of overdue debt of citizens in the last three years - 129.6bn rubles. This is almost 25% more than the figure for the same period last year, but only 0.62% higher than in 2022, according to data from the National Association of Professional Collection Agencies (NAPCA), which Vedomosti has. At the same time, the share of overdue debt purchased by collectors in January-June also turned out to be a record for the market over the past three years - 89.7% of all debts put up for sale, or 115bn rubles. In terms of share, the figure is close to last year's value, when out of 104bn rubles of overdue debt put up for sale, professional collectors purchased 90.1bn rubles, or 86.6%. For comparison: in January-June 2022, banks put up debts for 128.8bn rubles, and collectors bought 93.1bn rubles, or 72.2% of them. The average sale price of assignments (assignment of rights to claim payment to a third party) has been declining for three years in a row and in the first half of the year was at its lowest level since 2022 - 7.8% versus 8.04% a year ago and 9.25% for the same period in 2022. The cost of the assignment is determined as a percentage of the total amount of debt.
8.1.5 Liquidity, NIMs & CARs
Liquidity Situation Remains Challenged as Banks Expand Lending.
Despite some efforts to improve liquidity, the overall situation in the Russian banking sector has not seen significant structural improvement. Banks have continued to increase lending while liquid assets have declined. However, starting from July 1, 2024, systemically important credit institutions (SICIs) are required to maintain a Liquidity Coverage Ratio (LCR) of at least 50%, up from the previous 40%. This regulatory change is expected to enhance overall liquidity conditions in the sector.
Rouble-denominated liquid assets, which include cash, claims on the Bank of Russia, and unencumbered marketable securities, moderately decreased by 0.2 trillion roubles, or 1.2%, to 20.4 trillion roubles. Within this category, claims on the Bank of Russia fell by 1 trillion roubles, while unencumbered marketable securities increased by 0.7 trillion roubles. This shift was largely due to the unwinding of repo transactions with federal and regional governments (0.6 trillion roubles) and the Bank of Russia (0.1 trillion roubles).
The coverage of rouble client funds with liquid assets slightly decreased but remains near a comfortable level of 20% (21.4% in June, down from 21.8% in May). However, the situation varies across banks. The proportion of banks (by assets) with a coverage ratio of client funds with liquid assets below 20% has marginally decreased to 73% from 74% in May. Additionally, the share of
162 RUSSIA Country Report August 2024 www.intellinews.com