June 25, 2014 / 8:17 AM / in 4 years

RPT-Fitch Publishes 5M14 Russian Banks Datawatch

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June 25 (Reuters) - (The following statement was released by the rating agency)

Fitch Ratings has published the latest edition of the ‘Russian Banks Datawatch’, a monthly publication of spreadsheets with key data from Russian banks’ statutory accounts. The latest issue includes balance sheet figures as of 1 June 2014, as well as changes in May 2014. In addition, charts indicate changes in the last month for Russia’s main state-related, privately-owned, foreign-owned and retail banks.

Fitch notes the following key developments in May 2014:

- Corporate lending growth moderated to 0.4% after a strong 1.8% average for 4M14. Of the bigger banks Credit Bank of Moscow, Raiffeisen and Unicredit grew stronger by over 2.5%, while some of the bigger contractions were reported by MDM (-5.5%) and Rosbank (-3.3%)

- Retail lending growth was 1.2% in May (5.9% in 5M14), although still significantly below the 3% monthly average for last year. Of the May growth some 86% was accounted for by state banks. Among specialised retail banks Tinkoff and OTP grew in line with market, while Rencredit, Home Credit and Russian Standard were roughly flat. Sovcombank’s rapid 38% growth was mainly due to the transfer of retail loans from the recently purchased GE Money Bank

- Overdue loans increased by RUB119bn for the sector, of which VTB contributed RUB60bn (an amount equal to 10% of regulatory capital), related to RUB-denominated exposures to non-residents

- Customer funding (excluding funds of state-related entities, which we consider as part of government funding) increased by RUB107bn in May, which was a combination of a RUB195bn inflow of corporate accounts and a RUB88bn outflow of retail deposits. Most inflows of corporate funding were in private banks (Alfa-Bank - an increase of RUB33bn or 7%; Rosbank - RUB21bn, 10%; UniCredit - RUB25bn, 7%, Promsvyaz - RUB28bn, 8%). Of state-related banks Gazprombank increased corporate accounts by RUB46bn or 2%, while others jointly reported a RUB75bn outflow. Retail deposits leaked across the whole sector with the biggest outflows reported by Sberbank (RUB69bn of outflows), in part reflecting its market share

- The net increase of customer funding was sufficient to fund only 40% of May’s moderate RUB279bn lending growth, with the remainder being covered by funds attracted from state authorities, namely from MinFin (up RUB125bn at RUB643bn) and regional and federal budgets (up RUB76bn at RUB640bn), while Central Bank of Russia (CBR) funding was almost unchanged at RUB5trn. As a result, total government funding reached RUB6.5trn or 12.7% of total system liabilities at end-5M14. The CBR expects its funding of the sector to grow to RUB7trn by end-2014, although this could partly be used to refinance some seasonal outflows of MinFin deposits

- Banks earned net income of RUB93bn in May (17% annualised ROAE), although profits were mainly concentrated in Sberbank (RUB26bn), VTB Group (RUB20bn, of which RUB11bn earned by Bank of Moscow could relate to some one-off recoveries), Gazprombank (RUB8bn) and Alfa (RUB7bn), while 20 banks from the sample reported losses. Most specialised retail banks demonstrated poor performance and were loss-making or just moderately profitable. Home Credit’s RUB1.3bn net income in May was solely due to deferred tax recognition, without which it would have been slightly below breakeven

- Capitalisaiton remains moderate. As of 1 June, 14 banks from the sample had a total capital ratio (N1, 10% minimum) below 11%, including five below 10.5%. These were Promsvyaz (10.4%, moderately improved from 10.1% last month), Rencredit (10.2%, dropped again due to losses), Probusinessbank (10.4%, stable), Tatfondbank (10.3%) and Moscow Industrial Bank (10.3%)

Link to Fitch Ratings’ Report: Russian Banks Datawatch 5M14 - Excel file


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