Bank Asset Growth Rate Appears Lowest since Middle of 2010

The banking sector was confronted with a deficit in client resources in the third quarter of 2013. The basic cause of the shortfall was the refinancing by the Bank of Russia and the deposits of the Ministry of Finance.

Bank assets grew by 1.4% in September, which is higher than the previous two months. Nevertheless, assets for the quarter grew by only 3.2%, and the annual growth rate based on September results shrank to 17.2%. If you don't consider each first quarter of the year, when the financial indicator growth rate slows due to seasonal factors, the growth rate of bank assets for the third quarter of 2013 is the lowest since the middle of 2010.

Funds from the financial authorities made a significant contribution to the trend in the banking sector in the third quarter, guaranteeing 46% of the reserves in the banking sector. Without taking the funds from the financial authorities into consideration, the trend in bank assets would have been 0.5% in September, 1.1% for the third quarter and 14.6% for the last 12 months.


In active transactions for the last quarter, the banking sector increased its share of funds made in credits to corporate and retail clients. The share of these operations reached 72% of redistributed resources (the highest level after 2009) basically due to corporate lending, the total of which for resource utilization was the highest for the post-crisis period.


Funds from the financial authorities have been the foundation of the resource base of the banking sector for the last several months. Bank debt to the Bank of Russia in September rose by 311 billion rubles, to the Ministry of Finance by 211 billion rubles. Total debt of the banking sector to the Bank of Russia and the Ministry of Finance as of October 1, 2013 was 4 trillion rubles, raising the maximum level of critical state-backed bank support in nominal terms (3.7 trillion rubles).

The refinancing of the banking sector has not yet reached the level of the beginning of 2009 in relative terms (12.3% of assets and 8.2% of GDP), although it is the highest for the period since the beginning of 2010 (7.4% of bank assets and 6.1% of GDP).


Funds deposited by the public for September 2013 increased by only 0.4%, or 70 billion rubles; for the third quarter by 2.1% and 328 billion rubles respectively; the annual growth rate was 19.8%. In this regard, the growth for September in retail deposits was almost entirely in foreign currency accounts. If the volume in ruble savings in banks grew by only 0.1%, accounts in foreign currencies grew by 2.2%, expressed in dollars (2.0 billion dollars).

Overall for the third quarter, growth of bank deposits was 3.3% of the expendable income of households, which is a bit lower than in the third quarter of 2012 (3.6%). However, taking into consideration the growth of cash, the spending figure dropped by almost one percentage point - from 3.7% to 2.8% of expendable household income for the quarter.

Corporate funds in banks increased in September 2013 by 0.9% (109 billion rubles), but only by 0.5% (61 billion rubles) overall for the third quarter. Annual growth rates shrank up to 15.3%, compared with 16.8% for a month earlier.


As with retail, corporate clients also showed a preference in September for foreign currency accounts, which grew in volume by 4.5% (3.7 billion dollars). Ruble funds of corporate clients shrank by 0.1% by comparison.


M. Yu. Khromov - Head Expert, Center for Structural Research