Moscow, May 02, 2018 — Business Systems Consult. Consulting Company BSC prepared monthly review of Russian Banking System as of March, 2018, which covers the general tendencies and presents market shares of major participants. Detailed report is available upon request. Russian version is here.

The tendencies in Russian banking system can be summarised as follows.

1. Balance value slightly exceeded RUB 81tn (according to bsc methodology, +RUB0.49tn m/m). In major part this growth is based on foreign currencies balances and RUB devaluation (in March, from USD/RUB 56.3742 to 57.2649 yet).

2. RUB balance value did not change. Deposits of individuals allowed to fund retail lending (both +RUB0.2tn), corporate and government deposits helped to grow short-term corporate lending (+RUB0.3tn and +RUB0.35tn correspondingly). Interbank market volumes decreased, the disbalances emerged were covered through Central bank refinancing operations.

3. Asset volumes in foreign currency balance sheet grew more than liabilities volumes (+USD5.67bn and +USD3.86bn correspondingly). Corporate deposits and current accounts replaced interbank borrowing and helped to grow corporate lending (+USD1.48bn equiv.), nostro accounts and interbank lending (+USD4.80bn equiv. in total).

4. A borrower of the month is GPB (+RUB164bn of government term deposits, +RUB83bn in corporate term deposits). These proceedings were invested in Central bank deposit facilities. In general, the market volumes of corporate and government deposits both in RUB and foreign  currencies hit their record highs.

5. VTB grew its individual deposit portfolio, investing the proceedings into corporate lending.

6. Retail lending is likely to accelerate. The macroeconomic conditions justify credit risk level at historical lows. In this situation the main puzzle is to keep initial credit quality of the borrowers under control to prevent the market bubble.