Page 117 - RusRPTApr23

to exceed RUB1 trillion ($13.3bn), according to the Central Bank Chairwoman Elvira Nabiullina, PRIME reports.
This is a preliminary and conservative forecast that is lower than the RUB2 trillions recorded in 2021. The reduction is due to high spending on reserves as a result of mounting problems and the cancellation of regulatory exemptions this year. Nabiullina made this announcement during a meeting organised by the Association of Banks of Russia on March 2.
Nabiullina also predicted that Russians' deposits with banks will rise by slightly more than 7% in 2023, while corporate deposits with banks will grow by about 15%. However, corporate lending growth will slow down to 10% in 2023 from 14% in 2022 and 12% in 2021.
To support lending to priority projects until the end of summer, the Russian authorities will launch a program. The program will define criteria for projects aimed at technological sovereignty and structural adaptation, and the necessary changes to the banking regulation are being prepared together with the market.
Nabiullina also highlighted that mortgage crediting will increase by about 15% in 2023, and consumer lending by 10%. However, she cautioned that the quality of mortgages is deteriorating, and the regulator may take additional measures to curb risky mortgage loans.
The regulator has also seen some banks attempting to make quick money to compensate for the lower profits of 2022. If this behaviour creates systemic risks, the regulator may toughen its regulations and monetary policy. In 2022, some regulations were eased, which created the potential for credit expansion by about RUB15 trillions in the next five years. Cancellation of macro markups on retail and foreign currency corporate loans freed about RUB1 trillions for banks.
Nabiullina stated that the authority also plans to prolong restrictions on the flows of capital and foreign currency, including limits on the withdrawal of foreign currency cash, on trans-border transfers, and on the withdrawal of money by foreigners from non-friendly countries. At the same time, the central bank may lift the ban on opening foreign accounts for banks with basic licenses.
Finally, Nabiullina said that the regulator planned to meet with representatives of banks in March-April to discuss a concept of special associations that should allow small and regional banks to merge resources. Despite Western sanctions, Russia's financial system has withstood them, and banks did not use up all the reserves of previous years. Sanctions against new banks are no longer seen as shocks, and they create no system-wide risks.
117 RUSSIA Country Report Russia April 2023 www.intellinews.com