The regulator summed up the results of the last quiet month
The Central Bank summed up the results of the banks in March. This was the last month before the announcement of the self-isolation regime in many regions of Russia. During the same period, the national currency dropped against the US dollar by almost 18%.
In the past month, many organizations have actively taken loans to make up for losses. The banks’ corporate portfolio grew by 1 trillion rubles, or 2.6% compared to the previous month. In 2019, the increase in corporate loans was 5.8%.
Most of the companies took out loans from companies that are not included in the list of systemically important ones. However, their growth reached only 2.1%, and 5.5% rate surge faced the banks included in the top 100 largest ones.
The Central Bank explains the reasons for the lending activity growth by the fact that most organizations took out loans to compensate for losses that arose due to non-working days. Also, the Central Bank indicated a drop in the bond market activity. In March, the volume of trading in circulating corporate bonds increased by only 60 billion, and in February the figure was 230 billion.
Also, entrepreneurs expected tougher conditions for granting loans, as well as an increase in rates.
The number of outstanding payments for the last month remained practically unchanged. For corporate portfolios the indicator was 6.5%, for retail — 4.5%. In addition, the regulator is confident that the volume of outstanding loans will remain unchanged in the near future, since companies will receive credit holidays for most of them. Also, many loans will be restructured.
Individuals, meanwhile, withdrew about 315 billion rubles from deposits. They cashed money from deposits opened in foreign currencies, while ruble deposits remained unchanged. The greatest activity was noted at the end of the month. The regulator explained that citizens bought products to face self-isolation, and large investors made previously planned large purchases in anticipation that many goods could rise in price.
By the end of March, the excitement had subsided due to the receipt of salaries, as well as the beginning of quarantine. Representatives of the Central Bank don’t exclude a possible drop in rates on deposits of individuals, since some investors stay at home with no permanent income and withdraw funds from deposits.
Citizens also actively applied for loans. This happened in the last week of the month, and by the beginning of April the situation had stabilized.
Citizens’ interest in money grew, and the increase in the loan portfolio turned out to be greater than the inflow of money, as a result of which banks were forced to turn to the regulator for financial support.
At the end of last month, credit institutions raised about 870 billion rubles under standard instruments secured by shares, but by April 9 they returned all the money. The regulator also claims that individuals’ spending doesn’t usually affect the liquidity indicator of credit institutions, because the funds spent are credited to the accounts of organizations and remain in the banking system.
According to the March results, the profit of credit institutions was 190 billion rubles, which is 34% more than the average profit for the month in 2019. The most successful were 254 banks, which earned 79% of the industry’s funds. However, the regulator also claims that a significant share of profits came from three companies, whose names are not mentioned. The performance of many credit companies was driven by currency revaluation due to the Russian ruble fall.