August 22, 2017 / 3:16 PM / a year ago

Fitch Publishes 7M17 Russian Banks Datawatch

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: Russian Banks Datawatch 7M17 - Excel File here MOSCOW, August 22 (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 August 2017, as well as changes during July 2017 and since 1 January 2017 - Charts illustrating balance-sheet changes in 7M17 for the main state-related, privately owned, foreign-owned and retail banks Fitch notes the following key developments in the banking sector in July 2017: Corporate loans nominally increased RUB135 billion (0.4%), but after adjusting for a minor 1% rouble depreciation against the dollar, grew by a lower RUB48 billion (0.1%). The largest decrease of RUB517 billion (34%) was in Bank FC Otkritie (Otkritie) and was related mainly to RUB372 billion (of which RUB328 billion in foreign currency) unwinding of reverse repo transactions. At the same time Credit Bank of Moscow (CBOM) reported a significant RUB255 billion (23%) increase of corporate loans, of which RUB208 billion was reverse repos, suggesting that some of these could have migrated from Otkritie. Sound FX-adjusted corporate loan growth was demonstrated by Sberbank (RUB257 billion, 2.3%) and Alfa-Bank (RUB65 billion, 4.8%), both of which won Rosneft's public tender in July to provide it with loans of RUB125 billion and RUB71 billion respectively. Retail loans net of exchange movements grew RUB150 billion (1.3%). The growth was mainly in state-banks, namely in Sberbank (RUB53 billion, 1.2%) and VTB group (RUB44 billion, 2%). Among specialised retail banks Tinkoff Bank and Renaissance Credit (Rencredit) grew by about 3%, Home Credit & Finance Bank (Home Credit) by 1%, while Russian Standard and JSC OTP Bank (OTP) were stable. Adjusting for exchange rate moves, customer accounts increased RUB295 billion (0.6%), of which slightly over half was retail deposits and the remainder corporate funding. Nevertheless, liquidity came under pressure at Otkritie, which had a large RUB363 billion (24%) funding outflow, comprising RUB326 billion (36%) corporate accounts and RUB37 billion (6%) retail deposits, and had to resort to expensive Central Bank of Russia (CBR) borrowings to cover these (see Flight to Quality Pressures Some Russian Banks' Liquidity on Also large outflows of corporate accounts were reported by Russian Agricultural Bank (Rusag, RUB96 billion, 8%, partially offsetting RUB140 billion inflow in June) and AO UniCredit Bank (RUB107 billion, 16%, but repayments were as expected). Conversely significant increases of corporate accounts were seen in Sberbank (RUB350 billion, 5.9%), Gazprombank (GPB, RUB95 billion, 3.5%), Bank National Clearing Centre (RUB109 billion, 38%) and CBOM (RUB92 billion, 15%, which could be associated with a spike in reverse repos). July's retail deposits inflow was more or less even across the sector. State funding increased RUB413 billion after adjusting for currency moves, of which the bulk (RUB333 billion) was raised by Otkritie from the CBR to cover the funding outflow. Also VTB group was a major borrower from Minfin and other state entities, taking RUB100 billion and RUB60 billion correspondingly. Sector liquidity was very unevenly distributed. Sberbank and most large private and foreign banks have liquidity surpluses, as they have repaid the majority or all of CBR funding and as of 1 August kept RUB0.7 trillion on interest-bearing deposits with the CBR, which is considering issuing bonds to absorb excess liquidity from them. However, some large banks are still reliant on state funding, including state-owned VTB, GPB and Rusag, accounting for 67% of the RUB3 trillion outstanding, although the bulk is deposits from Minfin and regional budgets, which are less pricey than CBR loans. Among private banks, few used expensive rouble CBR funding, namely Otkritie (RUB338 billion) and B&N (RUB51 billion), attracting it in June-July to cover recent funding outflows. At 1 August, both banks had liquidity buffers covering about 20% of customer accounts, which for Otkritie is only moderate, given the magnitude of previous outflows. According to CBR sector data, some banks attracted further about RUB280 billion from the regulator in the first three weeks of August, suggesting continued pressure on liquidity. Also yesterday media reported that CBR provided an uncollateralised line to Otkritie, which could be positive, although this has not been officially confirmed by CBR or the bank. The sector reported a moderate RUB142 billion net profit in July (annualised ROAE of 20%). VTB group significantly outperformed the sector, earning RUB60 billion, of which the parent bank accounted for RUB49 billion (ROAE of 44%), although the nature of this income is unclear. This was followed by Sberbank with RUB56 billion (22%). Rescued earlier this year Peresvet Bank reported the biggest loss of RUB8 billion (38% of end-June equity), mainly due to RUB7 billion income tax, which may be related to income from previous debt restructuring. Among specialised retail banks, Tinkoff, Rencredit, OTP and Home Credit had healthy profits equal to 2%-4% of equity, while Russian Standard was breakeven. The sampled banks' average capital ratios were roughly stable as dividend payments (sampled banks paid RUB40 billion of dividends in July) were compensated by healthy internal capital generation, while lending growth was modest. All 10 systemically important banks complied with capital requirements including buffers (core Tier 1 6.1%, Tier 1 7.6% and total ratio 9.6%); however, Promsvyazbank had only a small cushion with a Tier 1 ratio of 8%, while the ratio should improve by 200bps-300bps in August, after the placement of a USD500 million perpetual bond in late July. Non-systemically important banks' requirements including buffers for core Tier 1, Tier 1 and total ratios were slightly lower at 5.75%, 7.25% and 9.25%, respectively. Three 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 were UBRIR, Absolut Bank (which expects to attract RUB5 billion of new equity in 3Q17) and Moscow Industrial Bank. An 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. In addition, Uraltransbank was in breach not only of the buffer but also the minimum Tier 1 capital requirement itself (reported ratio 4.9% at end-July vs. required minimum of 6%), which may result in regulatory intervention unless the bank is able to rectify this, according to a plan agreed with the CBR. We estimate that at end-7M17 capital buffers (excluding potential profits) of 22 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 three could absorb less than 1%. The latter were Bank SKS, Uraltransbank and UBRIR. 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