Reuters logo
Fitch Publishes 4M17 Russian Banks Datawatch
June 5, 2017 / 9:17 AM / 6 months ago

Fitch Publishes 4M17 Russian Banks Datawatch

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: Russian Banks Datawatch 4M17 - Excel File here MOSCOW, June 05 (Fitch) 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 May 2017, as well as changes during April 2017 and since 1 January 2017 - Charts illustrating balance-sheet changes in 4M17 for the main state-related, privately owned, foreign-owned and retail banks Fitch notes the following key developments in the banking sector in April 2017: Corporate loans nominally increased by RUB312 billion (0.9%), but after adjusting for a minor 1% rouble depreciation against the dollar grew by a more moderate RUB195 billion (0.6%). The largest FX-adjusted increases were reported by Sberbank (RUB100 billion, 0.9%), Gazprombank (RUB47 billion, 1.5%) and Raiffeisenbank (RUB17 billion, 5.2%), while considerable decreases occurred in National Clearing Centre (RUB28 billion, 4.4%, all corporate reverse repo) and Rusag (RUB19 billion, 1.3%). Retail loans grew by a moderate RUB105 billion (0.9%) after being adjusted for exchange rate movements. The growth was largely in state banks (RUB76 billion), particularly VTB group (RUB31 billion, 1.5%) and Sberbank (RUB39 billion, 0.9%). Among the specialised retail banks Tinkoff and Rencredit grew by 2%, Home Credit and Russian Standard were around stable, while OTP deleveraged by 1%. Sector overdue instalments remained almost stable, excluding a large RUB145 billion (2.5% of loans) reduction in VTB, reversing a similar spike in March, which, in Fitch's view, could indicate either a temporary problem or restructuring of some lumpy loan(s). The Ministry of Finance (Minfin) did not sell FX reserves in January-April, so there was no rouble issuance by the Central Bank of Russia (CBR) and so customer funding inflow was limited. Customer accounts (excluding those from government entities) nominally increased by RUB75 billion (0.2%) in April, but contracted by RUB93 billion (0.2%) after adjusting for currency moves. The latter figure consists of RUB407 billion (1.6%) outflows of corporate accounts and RUB314 billion (1.3%) inflows of retail deposits. Large FX-adjusted corporate accounts outflows occurred in VTB (RUB114 billion, 3%), Gazprombank (RUB201 billion, 7%), UnicCredit (RUB78 billion, 12%), Citibank (RUB26 billion, 10%) and VBRR (RUB26 billion, 14%), while Alfa enjoyed a big inflow of RUB66 billion (8%). Retail funding inflow was skewed towards Gazprombank, which managed to attract RUB61 billion (10%), with the remaining RUB252 billion retail funding inflow spreading evenly across the sector. State funding increased by RUB128 billion adjusting for currency moves. This was a net result of repayments of RUB20 billion to Minfin, RUB3 billion to other government funds and borrowings of RUB85 billion from regional and federal budgets and RUB59 billion from CBR. The largest increases in state funding were in VTB group (RUB145 billion), including RUB68 billion of borrowings from CBR, RUB24 billion from regional budgets and RUB53 billion from Minfin and in Alfa (RUB38 billion) due to RUB51 billion borrowings from CBR being partially offset by RUB13 billion repayments to regional budgets. At the same time Otkritie repaid a further RUB43 billion to CBR, while Gazprombank returned RUB77 billion to Minfin. Sector liquidity is unevenly distributed. Sberbank and most foreign and private banks have surplus liquidity, as they have repaid the majority of CBR funding and kept RUB0.6 trillion on interest-bearing deposits with CBR. However, VTB, GPB and Rusag are still reliant on state funding, accounting for 74% of the RUB2.8 trillion still outstanding. Some smaller banks also have tight liquidity, mainly Moscow Industrial Bank (6% of highly liquid assets, covering customer accounts by 7%) and Jugra (4%; 5%). The sector reported a moderate RUB116 billion net profit in April (annualised ROAE of 17%). Sberbank outperformed the sector earning RUB52 billion (21%). Also sound returns were reported by Alfa (RUB16 billion, earning 8% of end-March equity, partially due to provision recovery), Sovcombank (RUB6 billion, 12%,mainly due to recovery of reserves previously created against bonds of a failed bank following the latter's debt restructuring, most of which, however, were created again in May against subordinated bonds of this bank, to which Sovcombank became exposed following the restructuring) and Jugra (RUB6 billion, 27%, presumably due to reserve releases). Among the specialised retail banks, Tinkoff, Home Credit and Russian Standard reported sound profits of 3%-5% of end-March equity, while OTP and Rencredit were around break-even. The sampled banks' average capital ratios decreased 10bps-20bps due to moderate credit growth and an increase of FX risk-weighted assets as a result of rouble depreciation. . All 10 systemically important banks complied with capital requirements including buffers (core Tier 1 ratio of 6.1%, Tier 1 ratio of 7.6% and total ratio of 9.6%), however Promsvyazbank had only a modest cushion with a Tier 1 ratio of 7.8%. Non-systemically important banks' requirements (including buffers) are slightly lower 5.75%, 7.25% and 9.25%, respectively. Seven of the sampled 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. These are Post Bank, Roscap, UBRIR, Absolut, Moscow Industrial Bank, Orient Express and Uraltransbank. Inability to meet buffer requirements by the end of the quarter could lead to limitations on dividend payments, but would not represent grounds for a license withdrawal. Uraltransbank has also been in breach not only of the buffer but also the minimum Tier 1 capital requirement itself (reported ratio 5.3% at end-April vs. minimum 6%) for eight days in April, which, according to Russian legislation, may result in regulatory intervention. We estimated that at end-4M17 the capital buffers (excluding potential future profits) of 27 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 four could absorb less than 1%. The latter are SKS-bank (subsidiary of Credit Bank of Moscow), UBRIR, Moscow Industrial and Uraltransbank. The latest Datawatch is available at or by clicking the link. 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: Julia Belskaya von Tell, Moscow, Tel: +7 495 956 9908, Email:; Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: Additional information is available on 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. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE here. 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 © 2017 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