Banks balance their capital – Newspaper Kommersant No. 32 (7477) dated 21.02.

Banks’ balance sheet capital fell by tens of billions of rubles in January due to expenses associated with changes in the accounting for subordinated loans. Banks maintain the required level of regulatory capital, but a number of players still face problems. Until the end of the year, the largest market participants, except for Sberbank, may raise money in capital to strengthen their positions.

Russian banks in January received 258 billion rubles. profit, follows from the review of the banking sector by the Central Bank. At the same time, based on the data of the regulator, the authorized capital of the sector (excluding share premium, profit of previous years, etc.) grew in January mainly due to the additional capitalization of the Russian Agricultural Bank (RSHB) by 17.6 billion rubles to 2.98 trillion rub. Together with share premium, the capital of banks amounted to 5.1 trillion rubles. The RSHB was unable to assess the effect on capital adequacy ratios. The bank supporting the agro-industrial complex regularly receives tens of billions of rubles in capital injections from the state.

In general, according to the December assessment of the Central Bank, the need for Russian banks in additional capitalization in 2023 may amount to 700 billion rubles. The Central Bank did not see systemic problems with capitalization, however, individual players may have such a need. However, now estimates can be lowered, the head of the Central Bank, Elvira Nabiullina, noted on February 10. The largest amount of assistance is expected to fall on VTB – about 500 billion rubles.

The amount of potential support for banks in 2023 will be much less than the assistance provided by shareholders in 2022. Then, in the sector as a whole, the authorized capital, including share premium, increased by almost 180 billion rubles, mainly due to additional emission and other investments in capital, the Central Bank noted. The main additional capitalizations last year fell on Gazprombank (by RUB 50 billion), RSHB (by RUB 25 billion), PSB (by RUB 42.1 billion), MTS Bank (by RUB 11 billion), SSP Bank (by 10.1 billion rubles).

Traditionally, banks’ capital positions are heterogeneous. For individual players undergoing financial recovery, the hole in the capital increased in 2022. For example, the amount of negative capital at Investtorgbank increased significantly in January-November, amounting to minus 17.4 billion rubles at the beginning of December. The bank did not answer Kommersant’s questions, and the data after them was deleted.

Independent expert Olga Ulyanova notes that in 2022, Russian banks did not disclose their financial statements, which means that a detailed analysis is impossible. However, she admits that the capital of Investtorgbank could have declined due to the same reasons as in the system as a whole: “If the bank initially had problem loans on its balance sheet, then after February 2022 the situation around them could worsen even more.”

According to Yuri Belikov, Managing Director of Expert RA, the largest banks from the top 10 will account for the bulk of additional capitalization in 2023 due to the super-concentration of the banking sector. At the same time, according to previously published data, the sector leader, Sberbank, remains profitable. The amount of profit is an order of magnitude smaller than in the pre-crisis 2021, but it is there even after the bank “reflected losses by refusing to defer them due to acceptable regulatory easing,” notes Mr. Belikov. “Accordingly, Sberbank does not have an urgent need for direct additional capitalization, and other players in the top ten will most likely become its main objects,” the expert believes.

The total balance sheet capital of the banking sector for 2022 showed a minimal positive trend, while assets at risk grew significantly, especially in terms of loans issued to non-financial organizations and mortgage loans to the population, Yury Belikov notes. This, he clarifies, however, could not have had a significant negative impact on the overall estimated capital adequacy of the sector, since the dynamics of regulatory capital should outpace the dynamics of balance sheet capital due to regulatory easing. However, given the unrecorded losses, the expert admits, the burden on capital has rather increased, and the potential for taking on new risks has decreased.

Olga Sherunkova