Banking sector's profit in January-July 2023 totals ₽2 trillion, lending expands across all segments
Lending sped up in both the retail and corporate segments. In July, companies raised loans more actively than in June (the loan portfolio grew by 2.1% vs 1.3%), which may be associated with the desire to utilise the earlier approved limits amid increasing rates. The mortgage portfolio significantly increased (2.5%) for the second consecutive month. Concurrently, in July, the amount of mortgage loans issued under subsidised programmes increased by 12%, while that of market-based mortgage loans decreased by 7%. Consumer lending is expanding at a fast pace (+2.0%). However, we expect a gradual slowdown due to tighter macroprudential regulation and higher rates.
Household funds held in bank accounts continue to grow (+1.1%) but somewhat more slowly compared to their faster pace in June (+2.1%). Corporate funds grew moderately (+0.7%). Balances in the accounts of oil and gas, metallurgical and chemical companies increased.
In July, the profit of banks totalled ₽327 billion (return on capital jumped by 30% in annualised terms), which is generally in line with the figures of June. As before, revenues from the revaluation of foreign currency remain an important factor in profitability. Since the beginning of 2023, the banking sector has earned ₽2 trillion.
More details are available in the information and analytical material Russian Banking Sector Development in July 2023.