Page 118 - RusRPTJul24

Growth in Risk-Weighted Assets
The increase in RWA was driven by expanded lending and a rise in macro add-ons (+7% for the month), predominantly for consumer loans.
Capital Buffer
The capital buffer (above the regulatory minimum) slightly decreased in May, standing at 7.3 trillion rubles.
CAR: Preliminary data indicates that the total capital adequacy ratio (N1.0) decreased to 11.9% in May, a drop of 0.27 percentage points for the month. This decline was due to a reduction in total capital (-0.3%) alongside a growth in risk-weighted assets (RWA) by 2.2%.
Regulatory capital declined in May due to the dividend payouts and the negative revaluation of securities, which are accounted for directly in capital through other comprehensive income.
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BONDS: The volume of investments in debt securities in Russia remained largely unchanged in May, increasing by just 0.1 trillion rubles (0.6%).
Banks' Investments in OFZ
The volume of bank investments in federal loan bonds (OFZ) decreased by approximately 140 billion rubles due to a negative revaluation of around 180 billion rubles, attributed to the ongoing rise in long-term bond yields and partial sales in the secondary market. Despite this, banks purchased new OFZ issues worth about 65 billion rubles.
Ministry of Finance OFZ Placements
In May, the Russian Ministry of Finance placed OFZ bonds worth approximately 88 billion rubles, a significant drop from the 272 billion rubles placed in April. All these placements had a fixed coupon income. Banks were the primary buyers of these new issues, accounting for around 73% of the total volume, while non-bank financial organisations (NFOs) under trust management purchased about 18%.
The relatively stable investment in debt securities and the active participation of banks in OFZ purchases highlight the cautious yet steady approach to managing debt investments amidst fluctuating interest rates. The reduction in placements by the Ministry of Finance in May reflects a strategic adjustment to current market conditions.
CBR money: Significant Increase in Government Funds in Russian Banks in May
The volume of government funds held in Russian banks surged by 2.4 trillion rubles (+22.7%) in May. This includes an increase of 1.8 trillion rubles in
118 RUSSIA Country Report July 2024 www.intellinews.com