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Russian banks made record $31 bln in profit last year

MOSCOW, Jan 28 (Reuters) – Russian financial institutions built a document 2.4 trillion roubles ($31 billion) of revenue final yr as an economic rebound revived loans progress and boosted curiosity in serious estate belongings, the central financial institution claimed on Friday.

Sturdy oil costs helped Russia’s economic climate to expand by 4.5% previous yr, officers have stated, soon after a 2.7% contraction the past 12 months because of reduced commodities charges and the COVID-19 pandemic.

As a end result, banking sector earnings jumped by 50% from 1.6 trillion roubles in 2020, the central bank said. Corporate financial loans expanded by 11.7%, retail lending grew by 23% and the mortgage portfolio confirmed a more than 30% raise.

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Demand for authentic estate in Russia has boomed since 2020, when the central lender tried to help the design sector – and banks uncovered – through condition-backed mortgages throughout the pandemic.

The point out commenced rolling all those again very last July and, even though it lifted the critical desire amount 7 occasions to 8.5% previous yr, the central bank claimed it sees no signal of the sector overheating.

This 12 months, the regulator forecasts banking sector financial gain at around 2 trillion roubles but considerably less than in 2021, said Alexander Danilov, director of the banking regulation and analytics department, as limited financial plan puts the brakes on lending.

Yields on the government’s rouble-denominated OFZ bonds spiked this month as tensions escalated between Russia and the West in excess of Ukraine, but the central bank sees restricted possibility to the banking sector from an OFZ promote-off. Bond yields shift inversely to costs.

Russian banking institutions increased their OFZ holdings by 20% to 9.7 trillion roubles last calendar year, out of practically 16 trillion in total rouble bonds outstanding, the central lender stated, as foreigners ended up reducing their exposure amid increased sanctions pitfalls.

The central bank estimates that Russian banks will file 200 billion roubles in losses from the revaluation of OFZs in their portfolios, but the hit to the general sector’s funds would be offset by revenue and sturdy liquidity buffers.

VTB (VTBR.MM), Russia’s next-biggest bank, this week stated that the modern sell-off of nearby property need to not have “a sizeable effects” on its capital adequacy ratios.

($1 = 77.8410 roubles)

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Reporting by Elena Fabrichnaya extra reporting by Alexander Marrow
Producing by Katya Golubkova
Enhancing by David Goodman and Louise Heavens

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