The influx of public funds into the banking system in January offset a seasonal decline in client funds

Long holidays had an impact on the sector in January, shows information-analytical material “On the development of the banking sector of the Russian Federation in January 2020.”

In January, the total loan portfolio decreased slightly due to large repayments from some banks. Also there was a small decrease in client funds, which is quite typical for that month taking into account the long holidays.

Continued to slow down consumer lending (+0.8%, in December of the previous year — +1.0 percent), which may be associated with measures of Bank of Russia on the cooling of the segment of unsecured loans and seasonality.

Corporate portfolio (including loans to non-financial and financial institutions, except banks) decreased by 0.9%, while a significant decline has occurred at several large banks and has affected mostly ruble-denominated loans to financial institutions — it could be due to large repayments on some borrowers.

Typical for the beginning of the year decrease in deposits was 1.5%. Also slightly reduced the deposits and assets of organizations (0.1%) due to large payments for taxes.

The influx of public funds into the banking system to offset seasonal outflows of client funds. This, as well as the decline in cash in circulation associated with the new year, contributed to the increase in surplus liquidity (3.6 trillion rubles at the end of January).

In January net profit of the banking sector amounted to 197 billion rubles, significantly more than the average profit for the year 2019. Profit growth may be bound, including foreign currency revaluation on the background of growth of the dollar in the beginning of the year.

Starting materials in January 2020 in the report “On the development of the banking sector” banking sector assets will be presented on a net basis (net of allowances for possible losses and income tax). It including will allow to more accurately assess the share of certain obligations in liabilities. In addition, the rate of corporate lending are now included not only loans to non-financial organizations, financial (excluding banks). The latter category includes, for example, leasing and factoring companies (including captive Finance companies of banks), as well as the organization associated with large corporate clients.

20 Feb 2020