Net profit of Russian banks triples to 204 bln rbl in June

MOSCOW, Jul 26 (PRIME) -- The combined net profit of Russian banks almost tripled on the year but fell by 5.6% on the month to 204 billion rubles in June, the central bank said in a report on Monday.

Return on equity amounted to 22% thanks to negative currency revaluation as the ruble strengthened.

In January–June, the net profit of Russian banks almost doubled on the year to 1.2 trillion rubles due to lesser spending on reserves, which shrank to 298 billion rubles from 729 billion rubles, and to expansion of businesses. The net interest income grew by 13%, or by 223 billion rubles, and the net fee and commission income rose by 27%, or by 150 billion rubles, in the period.

Retail lending expanded by 2.5% in June, up from 2.2% in May, with the increase in provision of mortgage loans speeding up to 3% in June from 2.1% in May, and of unsecured consumer loans by 2%. The growth of corporate lending slowed down to 0.4% in June from 2.5% in April and 1.1% in May, which is comparable to the average level of 2019.

As of the end of June, the combined corporate loan portfolio of Russian banks stood at 48.136 trillion rubles, while the combined retail loan portfolio amounted to 22.756 trillion rubles.

Corporate deposits with Russian banks contracted by 0.5%, or by 177 billion rubles, to 33.611 billion rubles in June mainly due to contraction of foreign currency deposits on accounts of oil and gas companies and of metals companies. The share of foreign currency corporate deposits decreased to 31.1% from 32.5%.

At the same time, retail deposits gained 0.4%, or 123 billion rubles, to 32.378 trillion rubles.

The regulator also improved its forecast for the combined net profit of the banking sector in 2021 to a record of 2 trillion rubles or even higher from the previous expectation of 1.5–1.7 trillion rubles.

Alexander Danilov, head of the central bank’s banking oversight department, told reporters in a news conference that households’ deposits with Russian banks may grow by up to 5% this year due to a traditional inflow of money in December and an expected increase of interest rates on deposits.

The authority also did not rule out that the risk of overheating of the mortgage lending market will decrease due to the changes in the government’s cheap mortgage loan program.

“We have seen that already in the preliminary figures for the first two weeks of July. We saw that issuance rate under the main program fell significantly,” Danilov said.

(73.7663 rubles – U.S. $1)

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