Acceleration of bank lending in 2018

Banking sector assets increased by 6.9% in 2018. Growth in assets was mainly achieved on account of lending expansion: the aggregate bank lending portfolio to non-financial organisations and households was up by 10.7% during the year. This is evidenced by data from the information and analytical publication ‘Russian Banking Sector Developments in 2018’ available on the Bank of Russia website.

The year saw an acceleration in lending specifically to households (by 22.8%), and a slight slowdown in the growth of retail bank deposits amid households’ gradual transition from a savings to consumption behaviour model. The rebound in lending was driven by a drop (across most of the year) in interest rates and was evolving as part of a transition to economic growth and an increase in real household income. The quality of bank credit portfolios levelled off.

At the same time, the inflow of household funds (+6.5%) as well as corporate funds (+6.0%) to bank deposits is a sign of remaining trust in the banking sector.

The efficiency of banking business improved: the 2018 profit (1.345 trillion rubles) exceeded the outturn of 2017 1.7-fold (0.79 trillion rubles).