Russian banks are losing income because of the situation in Ukraine. This applies to both private and public financial institutions. Nevertheless, analysts expect that the situation will stabilize by the end of the year.
The situation in Ukraine continues to affect the profitability indicators of Russian banks, both private and public. PSB announced today that he has lost a significant part of their profits in the first half of the year due to “geopolitical factors.” However, up to six months bank Accounting Standards IAS still managed to get a plus and a net profit of 0.6 billion rubles. ($ 4.5 billion a year earlier). In the first quarter, the bank posted a loss (2.1 billion rubles.) Due to a negative assessment of the securities and incurred expenses in the amount of 6.9 billion rubles. due to provisions for loan impairment. Loss of the first quarter was compensated in the second – net income of 2.6 billion rubles.
The bank explained that the first half was marked influence of negative macroeconomic and geopolitical factors ” could not affect negatively the activity. »
The bank claim that the “Ukrainian syndrome” was overcome. In the second quarter of 2014 the bank showed the return on equity of 16%, “will fully compensate for the losses of the first quarter,” said Chief Financial Officer of PSB Vladislav Khokhlov, whose words are contained in the press release. In addition, net interest income for the first half increased by 19%, while net fee and commission income – by 40%. Total customer deposits increased in the first six months by 11% and amounted to 543 billion rubles. compared with 488 billion at the end of 2013. This Ukraine, on the contrary, “helped”: against the background of worsening geopolitical situation in the first half was characterized by the bank’s substantial inflows of large corporate clients in deposits, the bank said in a report. The bank announces its intention to raise capital in an additional $ 300 million by year’s end.
The drop in net income and deterioration caused by including geopolitics, fixed and other banks. Thus, the net profit of Raiffeisenbank IFRS in the first half amounted to only 10.2 billion rubles., Which is 7.6% less than the result of the same period last year. Net interest income before deducting the cost of provisioning for impairment losses increased by 17.6% to 20.42 billion rubles. In the provision for possible loan losses for the six months was sent to 3.13 billion rubles., Most of this amount (2.3 billion) went to the reservation in the retail portfolio, which showed growth of arrears. In general, the volume formed by the bank reserves for possible loan losses amounted to 19.709 billion rubles.
Last week, the parent organization of the bank – Raiffeisen Bank International – reported that does not preclude the growth of spending on reserves in case of deterioration of the situation in Ukraine.
lower performance and one of the largest Russian banks VTB – net profit on international financial reporting standards decreased by 5.5 times on an annualized basis, up to 5 billion rubles. VTB results were worse than analysts’ forecasts. Experts had expected a decline in net profit by 2.1 times to 13.3 billion rubles. In the second quarter of 2014, VTB received 4.6 billion rubles. income, which is 2.6 times lower than in the same period of 2013, when it was recorded by 11.9 billion rubles.
Net interest income and net fee and commission income groups in the first half of 2014 increased by 17.9 and 12.5% respectively compared to the same period last year. In came under the State Bank sanctions as explained geopolitics. “The difficult operating environment and the corresponding high level of cost of risk had a negative impact on the profitability of VTB in the second quarter and first half of 2014, as we considered it necessary to maintain a conservative approach to provisioning. At the same time, our results for the first six months have once again demonstrated that the group is ready to successfully resist both geopolitical and macroeconomic challenges, “- commented on the financial results of the group head of VTB Andrey Kostin.
Fixes drop in profits in the banking sector and central bank.
According to the Bank , the profit of the 30 largest banks in Russia in the first half decreased by 6.6%.
«Falling profits in the first half of the year mainly due to the fall of the economy, as well as the increase in the number of overdue reserves. Because of this, banks increase reserves, and this reduces their profits – says “the Newspaper” senior analyst “Zurich Capital Management” Mr. Markov. – His role is also played by the weakening of the ruble increased geopolitical risks due to the conflict in the Ukraine, as well as sanctions ».
The Russian economy in its current state is close to a recession due to slower-than-expected GDP growth rate , warned Tuesday the director of the Department of Macroeconomic Forecasting mayor Oleg deadbolt. Number of non-performing loans continues to grow, and the situation in Ukraine is still far from stable.
«However, by the end of the year we will see some stabilization. Geopolitical risks should begin to weaken, and the Russian economy should begin to stabilize, “- hopes Markov.
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