Bank lending strong in October; banks’ bond investment growing
Banking sector assets rose 0.9% in October, notes the information and analytical commentary ‘Russian Banking Sector Developments in October 2020’.
Banks ramped up their investment in debt securities by 9.6% in the month, mostly in OFZs. Growth in corporate lending was up 1.0% to total 8.7% year to date, hitting a record high since 2014. Retail lending expanded 1.9% in October, with mortgage lending remaining the key contributor.
Corporates’ funds showed no growth in October, owing to major tax payments, among other things. Increasingly popular alternative investment instruments and other factors sent household funds down 0.8% (excluding escrow accounts, which gained 156 billion rubles in October). Meanwhile, growth was reported in funds attracted by the Federal Treasury and the Bank of Russia.
The banking sector reported a net profit of 169 billion for the month. For the first ten months of 2020, banks’ profit was 1.3 trillion rubles (annualised return on capital at 15%).
