Reuters logo
Correct: Fitch Publishes 1M17 Russian Banks Datawatch
March 14, 2017 / 11:23 AM / 9 months ago

Correct: Fitch Publishes 1M17 Russian Banks Datawatch

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: Russian Banks Datawatch 1M17 - xls here MOSCOW/LONDON, March 14 (Fitch) This announcement corrects the version published on 3 March, clarifying that compliance with capital buffers is required at the end of each quarter. Fitch Ratings has published the latest edition of the "Russian Banks Datawatch", a monthly publication of spreadsheets with key data from Russian banks' statutory accounts. The publication includes: - Balance sheet numbers as of 1 February 2017, and changes during January 2017 - Charts illustrating balance-sheet changes in 2017 for the main state-related, privately owned, foreign-owned and retail banks Fitch notes the following key developments in the banking sector in January 2017: Sector corporate loans nominally contracted by RUB243 billion (0.7%), but after adjusting for 1% rouble appreciation against the dollar the decrease was a smaller RUB145 billion (0.4%). Notable currency-adjusted decreases were reported by Sberbank (RUB93 billion, 0.8%), Alfa (RUB53 billion, 4.1%) and Credit Bank of Moscow (RUB39 billion, 3.9%), while there were considerable increases at Gazprombank (RUB30 billion, 0.9%), Raiffeisen (RUB26 billion, 8.1%) and Orient Express (RUB34 billion, 4.5x end-2016 corporate loans, due to merger with Uniastrum bank). Retail loans contracted by a moderate RUB19 billion (0.2%) after being adjusted for exchange-rate movements. The largest decrease was at Nordea (RUB16 billion, due to the sale of the mortgage portfolio to Sovcombank) while the largest increase was at Orient Express (RUB15 billion, 12.3%, due to the merger with Uniastrum). Only Tinkoff among the specialised retail banks increased loans, by 3%, while Russian Standard, Home Credit, OTP and Rencredit deleveraged by 0.4%-1%. Customer accounts (excluding those from government entities) nominally increased by RUB545 billion (1.1%), and by RUB677 billion (1.4%) after adjusting for currency movements, resulting from a RUB743 billion (3%) rise in corporate accounts and a RUB66 billion (0.3%) contraction in retail deposits. Large corporate account increases occurred at VTB (RUB435 billion, 10%, mainly due to growth of FX deposits with a maturity of more than three years from local corporates) and Rosneft-controlled VBRR (RUB203 billion, 140%, due to growth of FX current accounts).This significant inflow of foreign-currency funding correlates with the Central Bank of Russia's (CBR) FX reserves increase of about USD13 billion in January and therefore could be cross-border. Considerable increases in corporate accounts were also reported by Otkritie (RUB70 billion, 8.9%), Alfa (RUB32 billion, 3.8%) and Surgutneftegazbank (RUB34 billion, 42%). Retail deposits were more or less stable, while Orient Express' large RUB55bn increase (59%) was due to the merger with Uniastrum. State funding decreased (adjusting for currency movements) by RUB347 billion (9.8%). This was a net result of repayments of RUB771 billion to the CBR and RUB29 billion to other government entities, and borrowings of RUB427 billion from regional and federal budgets and RUB26 billion from the Ministry of Finance (MinFin). The largest repayments to the CBR were made by VTB (RUB414 billion) and Gazprombank (RUB65 billion), which were also the largest borrowers from regional and federal budgets, taking RUB183 billion and RUB82 billion, respectively. Considerable repayments of CBR funds were also reported by Otkritie (RUB101 billion), Credit Bank of Moscow (RUB43 billion), Express-Volga (RUB42 billion) and SMP bank (RUB44 billion). Remaining state funding was RUB2.3 trillion (excluding RUB0.4 trillion of CBR FX repo and the CBR's RUB0.5 trillion loan to Sberbank), of which the main users were VTB group (50% of total sector state funding; 10% of group liabilities), Gazprombank (16%; 8%) and Rusag (9%; 8%). We expect a further reduction of state funding in 2017 due to continued liquidity inflows driven by the CBR rouble issue. This issue is mainly related to the purchase of foreign currency from MinFin reserve funds used to finance the budget deficit of about RUB2.8 trillion in 2017. MinFin plans to increase net borrowings to RUB1 trillion, so the remaining RUB1.8 trillion of deficit financing (RUB2.1 trillion in 2016) should be met mainly by selling reserves to the CBR. The continued rouble issuance is leading to a build-up of excess liquidity in the sector. The CBR has been sterilising this through deposit auctions, and in January conducted four one-week auctions for RUB500 billion-800 billion each. The outstanding amount of such placements with the CBR at end-January was a significant RUB935 billion (1.3% of banks' assets). We believe some of this money will be used by banks to buy government bonds as their issuance increases, although the liquidity surplus will not disappear as MinFin places temporary free funds with the banks or budgetary spending feeds into customer deposits. The sector reported RUB120 billion net profit in January (annualised ROAE of 17%), but adjusting for RUB83 billion of negative adjustments to last year's earnings recognised in equity, profit was a weaker RUB37 billion (5%). B&N Bank reported a large adjusted loss (RUB4.6 billion, 6% of end-2016 equity). Among the specialised retail banks, Tinkoff reported sound adjusted profit (5% of end-2016 equity). Russian Standard, Home Credit and Rencredit had more moderate but positive results of 1%-2%, while OTP lost 2.5%. The sampled banks' average capital ratios were roughly stable in January due to an absence of lending growth, limited currency movements and stable capital bases. The average total capital ratio was 13.6% (required minimum, excluding buffers: 8%), the Tier 1 ratio 9.5% (6%) and the Core Tier 1 9.2% (4.5%). In January the CBR increased the capital conservation buffer to 1.25% and systemic importance buffer to 0.35% from 0.625% and 0.15%, respectively, in 2016. Therefore systemically important banks now need to achieve a core Tier 1 ratio of 6.1%, a Tier 1 ratio of 7.6% and a total ratio of 9.6%, while other banks need to reach 5.75%, 7.25% and 9.25%, respectively. All 10 systemically important banks complied with the capital ratios including the revised buffers, although two of them, Gazprombank and Promsvyazbank, have only moderate Tier 1 cushions, with ratios of 8% at end-January. Gazprombank should improve its Tier 1 ratio by about 200bp once its 2016 profit has been audited (this is currently treated as Tier 2 capital) and by a further 150bp-200bp when it receives new capital from Gazprom. Eight of the non-systemically important sample banks (excluding failed and rescued banks and those not reporting capital ratios) had capital ratios above the minimum capital requirements, but did not meet the regulatory buffers, although this does not represent a regulatory breach as compliance with buffers is required only at the end of each quarter. These are Globex, Orient Express, Rencredit, UBRIR, Moscow Industrial, International Financial Club, Uraltransbank and Jugra. Inability to meet buffer requirements could lead to limitations on dividend payments, but would not represent grounds for a licence withdrawal. However, Fitch believes that in some cases the CBR could discuss potential measures to strengthen capital with bank owners. We estimate that at end-1M17 the capital buffers (excluding potential future profits) of 28 of the sampled banks (excluding failed and rescued banks, and those not reporting capital ratios) were sufficient to absorb potential losses equal to less than 5% of loans (based on minimal capital requirements) and two could absorb less than 1%. The latter are SKS-Bank (subsidiary of Credit Bank of Moscow) and UBRIR. The latest Datawatch is available at www.fitchratings.com or by clicking the link above. Contact: Anton Lopatin Director +7 495 956 70 96 Fitch Ratings CIS Limited 26 Valovaya Street Moscow 115054 Ruslan Bulatov Associate Director +7 495 956 99 82 Alexander Danilov Senior Director +7 495 956 24 08 James Watson Managing Director +7 495 956 6657 Media Relations: Elaine Bailey, London, Tel: +44 203 530 1153, Email: elaine.bailey@fitchratings.com; Julia Belskaya von Tell, Moscow, Tel: +7 495 956 9908, Email: julia.belskayavontell@fitchratings.com. Additional information is available on www.fitchratings.com Related Research Russian Banks Datawatch 1M17 - pdf here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2016 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below