Banks cope with stress well overall
The Bank of Russia resumes the publication of its quarterly review Banking Sector providing more detailed information about main events that impacted the financial situation in the banking sector. The review presents the analysis of factors influencing banks’ financial performance and capital, movements of net interest margin and the cost of risk, and the analysis of the loan portfolio by segment with an in-depth description of its quality.
In 2022, the banking sector’s profit totalled 203 billion rubles, plummeting compared to 2021 due to a fivefold increase in expenditure for provisions and material losses resulting from foreign currency revaluation. In 2023, the banking sector can earn over 1 trillion rubles, provided there are no new shocks. Expenditure for provisions in general will decline compared to 2022, and interest and fee income will go up considering the expansion of loan portfolios and the stabilisation of the economic situation.
Lending to businesses (including small and medium-sized enterprises) edged up by 14.3% in 2022, including through the substitution of external borrowings and the continuing growth of housing construction. In addition, businesses were actively converting foreign currency loans into ruble ones. In 2023, the expansion of corporate lending might slow down to
Retail lending in 2022 was predominantly driven by mortgages (+20.4%), whereas consumer lending edged up only slightly (+2.7%). In 2023, the expansion of mortgage lending might decelerate to
Amid the stabilisation of the situation, households’ funds are expected to increase in 2023 slightly more than in 2022, namely by