Bank lending hits record high in March

The corporate credit portfolio went up to a two-year high of 1 trillion rubles (2.6%), probably driven by the need to set off a drop both in revenues and activity in the bond market, as well as by expectations that banks might tighten their lending policies. Loan disbursement peaked in the final week of the month. Retail lending also showed more robust growth compared with January and February (+1.6% in March vs +1.2% in February).

Funding remained consistently steady overall, for all the volatility we highlighted in the course of the month. Household deposits, mainly those in foreign currency, saw a slight reduction (1%), whereas those in rubles remained steady. This reduction was fully offset by an inflow of funds into corporates’ current accounts and deposits (+2.1%). Banking sector liquidity was further supported by growing funds in public financial authorities’ accounts, which may come as a result of tax receipts, among other reasons.

The banking sector posted a net profit of about 190 billion rubles for March. This is 34% above the monthly average of banks’ net profit for 2019. However, the bulk of this value is attributed to several major banks.

Beginning in March 2020, the focus of the information and analytical review ‘Russian Banking Sector Developments’ will shift towards the most meaningful sector developments in the reporting month. This explains a forthcoming change in its format and structure. For the sake of visual representation, the study will still contain tables and charts with sectoral data for previous periods.