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Bank of Russia improves forecast for banks amid strong performance in early 2023

13 June 2023

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If there are no new shocks, the banking sector might be able to earn over ₽2 trillion as of the end of 2023, which exceeds the previous estimate of up to ₽1.5 trillion. The main reasons why the Bank of Russia has revised its forecast are a significant margin (the annual forecast has been increased to 4.3–4.5%) and high actual figures of early 2023 (₽1.1 trillion over the first four months of the year), including as a result of the foreign currency revaluation following the ruble weakening.

The forecast growth rate of corporate lending has been raised to 9–13% from the previously predicted 8–12% considering the strong performance in 2023 Q1 (+2.8%) and April (+1.7%). As to the retail segment, mortgage lending has been expanding quite quickly despite the curtailing of high-risk mortgage lending from developers. Therefore, the forecast range for the year has been adjusted upwards by 1 percentage point to 13–17%. The expansion of consumer lending has sped up and is expected to reach 9–13% as of the end of the year.

Funding trends are generally in line with the forecasts. Specifically, companies’ funds might grow by 13–17% over 2023 (the earlier forecast was 12–16%), driven by increased economic activity, and households’ funds will edge up by 8–12% which is the same as predicted before.

More details are available in the quarterly analytical review Banking Sector.

Preview photo: Valerii_M / Shutterstock / Fotodom

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