Lending growth is moderate in February, while consumer lending exceeds expectations
The expansion of mortgage lending accelerated by 0.7% compared to 0.6% in January, which was predictable considering the low levels in January because of the holidays. Consumer lending increased by 0.9% in February. This is the same as in January, but still notably above the Bank of Russia’s expectations.
The growth of the corporate loan portfolio was moderate (+0.6%) compared to its close-to-zero dynamics (-0.01%) in January.
The inflow of households’ funds reached 2.5%. Such a significant rise is not typical of February and was apparently associated with the considerable indexation of social payments and still high deposit rates. Companies’ funds also increased quite substantially, namely by 1.0%.
The banking sector’s profit declined by 22% in February to ₽275 billion (return on capital — 23% in annualised terms) compared to ₽354 billion (30%) in January. Nevertheless, the sector’s profit still exceeds the forecast owing to the low cost of risk for corporate loans.
More details are available in the information and analytical material Russian Banking Sector Development in February 2024.