2017 Q1 lending trends mainly driven by retail expansion

In the first half of 2017, banking sector assets were up 2.2%. Loans to the economy rose 1.8%, including 1.0% growth in lending to non-financial institutions.

More dynamic data came from the retail segment. In this way, loans to individuals grew 3.8% to 11.2 trillion rubles. Beyond sustainably rising mortgage lending, this segment demonstrated ongoing moderate growth of unsecured consumer loans over the last few months.

The recovery in lending was supported, among other things, by somewhat lower rates.

Banks’ half-year financial results showed a profit of 770 billion rubles. The period saw further improvement in banks’ profit margins.

The June 2017 statistics feature a 1.6% rise in household deposits with a concurrent reduction of 1.2% in the amounts of corporate deposits.  Improvements were evident in the quality of loan portfolios: the share of past due debt in the corporate sector dropped during the month from с 6.6% to 6.5%, and from 8.1 to 7.8% in retail banking.

For details of baking sector trends, please refer to the Bank of Russia’s web publication ‘Review of the Banking Sector of the Russian Federation in June 2017’.