Banks have worked on interest – Kommersant

The banking sector received record interest income in the past quarter. This became possible both due to expensive loans issued last year and active growth in lending. However, experts warn of a possible further decline in interest margins.

The ratio of net interest income of the banking sector to net fees in the first quarter of 2023 was a record high since the second quarter of 2020, follows from the statistics for review of the Bank of Russia on financial stability, published on the website of the regulator. According to the results of the last quarter, banks received 1.33 trillion rubles. net interest income and 419.9 billion rubles. net commission.

The volume of interest income was a record at least since 2018. Their quarterly volume exceeded 1 trillion rubles. only in the second quarter of 2021, after which it remained stable at this level, with the exception of the height of the crisis in the second quarter of 2022, when they fell.

According to the Central Bank, the profitability of the loan portfolio of banks is gradually declining. So, in the first quarter of 2023, it amounted to 9.5%. This is lower than at the peak of the first and second quarters of last year – 9.9% and 11.2%, respectively.

But the cost of funding from banks in the last quarter was 4.5%, unchanged compared to the previous quarter, and in the first and second quarters of 2022 it reached 4.9% and 8.2%.

According to experts, this situation in the first quarter of this year led to an increase in interest income. “The banks’ margins are still high: the cost of funding has decreased, and the return on assets with a longer term is still high,” explains Olga Naydenova, Senior Analyst at IB Sinara. A large amount of interest income in the first quarter is, among other things, a consequence of loans issued in 2022 at high rates (after the growth of the key one – up to 20% per annum), says Denis Taradov, partner of the Unicon audit and consulting group. In his opinion, banks are not capable of maintaining high interest rates for a long time, since customers are very sensitive to the cost of a loan and, moreover, they are now widely using refinancing opportunities. According to him, the average term of “expensive” loans may be 1-1.5 years, so the effect may already be running out.

“Certainly, the growth of interest income is also associated with the growth of lending. Interest rates on loans were falling, and pent-up demand was realized,” continues Mr. Taradov.

According to the Central Bank, the corporate loan portfolio of Russian banks in April 2023 grew by 1.7%, to 63.1 trillion rubles. Retail lending showed an increase of 1.2%, the portfolio reached 12.4 trillion rubles.

“The steady growth of the corporate loan portfolio has been maintained for the third month in a row,” the regulator says in its materials.

With regard to commission income, banks are now in the struggle for new customers began to sacrifice them, Mr. Taradov believes. According to him, banks are trying to attract customers by reducing settlement fees. However, high income banks still continue to bring fees for transfers abroad, said Mr. Taradov. Banks’ fee and commission income is highly dependent on transactional activity, Ms. Naydenova notes. However, there are commissions that accompany lending, and now consumer lending has intensified, she says.

Olga Sherunkova