Russian banks extend bull run by posting $3bn in profits for May

Russian banks extend bull run by posting $3bn in profits for May
Russian banks are currently making more profits than at any time in the last five years and comfortably outperforming both 2019 and 2020 income levels
By bne IntelliNews June 24, 2021

The combined net profit of Russian banks rose 7% month on month to RUB216bn ($2.98bn) in May, extending the bull run for the sector that is currently making its best returns in five years, the Central Bank of Russia (CBR) said on June 21.  

In January-May, the net profit of Russian banks almost reached RUB1 trillion, the regulator said.

The number of profitable banks rose to 234 from 221.

Russian banks raised corporate lending by 1.1% on the month in May, while retail lending increased by 2.2%.

Corporate deposits with Russian banks grew by 2.4% in the period, while retail deposits fell by 1.5%.

The net profit of Russian banks will likely exceed the central bank’s previous forecast of RUB1.5-1.7 trillion in 2021 and will be around RUB2 trillion, the regulator said.

Russian banks are currently earning their best profits in five years and profits are now ahead of every year for the last five years on a cumulative basis too. Part of the uplift for the sector is the improving economic environment and the fall in non-performing loans (NLPs) that has allowed many banks to release capital held as provisions against bad debt that can be added to their bottom line.  

 

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