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MIL OSI Translation. Region: Russian Federation –

Source: Central Bank of Russia – Central Bank of Russia –

The banking sector earned about 0.6 trillion rubles in the fourth quarter of 2023, which is 40% lower than the result of the third quarter. The decrease was caused by negative currency revaluation, a seasonal increase in operating expenses, as well as an increase in provisions for corporate loans.

After strong performance last year and a weak 2022, sector profits by the end of 2024 may decline to 2.3–2.8 trillion rubles due to shrinking margins, a return to reserve costs to average historical levels, and a much smaller effect of currency revaluation.

Corporate lending increased by 6.2% in the quarter, and at the end of the year showed a record growth of 20.1%. In 2024, the pace of lending is expected to decline to 6–11% due to tight monetary conditions and the need to restore the liquidity buffer of systemically important banks after the cancellation of relaxations on the short-term liquidity ratio.

Retail lending slowed down in the fourth quarter: mortgages are not yet very strong due to government programs, consumer lending is more significant due to macroprudential limits. In 2023, mortgages grew by a record 34.5%, and consumer loans by 15.7%. In 2024, we can expect a noticeable cooling in retail: mortgage growth is forecast to be 7–12% per year, and consumer lending growth is expected to be 3–8%.

Corporate funds for the quarter increased by 8.2% due to the influx of budget funds and export earnings, and household funds increased by a record 10.7% due to advances in December of January pensions, budget and social payments, as well as growth in household incomes. In 2024, more moderate dynamics are expected: the growth of corporate funds will be in the range of 7–12%, and the growth of household funds will be 8–13%.

More detailed information is provided in the quarterly report “Banking sector”.

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Note; This information is raw content directly from the source of the information. This is exactly what the source states and does not reflect the position of MIL-OSI or its clients.

Please note; This information is raw content directly from the information source. It is accurate to what the source is stating and does not reflect the position of MIL-OSI or its clients.

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and or sentence structure not be perfect.

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