“Dom.rf” borrowed for housing – Newspaper Kommersant No. 43 (7488) dated 03/15/2023

Dom.rf Bank was able to increase its net profit by 67% in 2022, mainly due to the growth of net interest income based on mortgage lending, project financing and infrastructure housing projects. In order to maintain planned growth rates, the bank actively attracted client funds, mainly from legal entities. Such a strategy carries the risks of gaps in terms of financing and lending – the bank’s loan projects are long-term, and the funds of companies are very unstable.

Dom.rf Bank published 2022 financial statements in accordance with international standards. Its net profit grew by 67% to 24.7 billion rubles. Net interest income increased by 75% to RUB 49.5 billion, net fee and commission income increased by 52% (to RUB 4.6 billion).

According to Vladimir Teterin, Senior Director for Banking Ratings at Expert RA, the key task of the bank is to comprehensively ensure the development of the housing sector, so “it is not surprising that a noticeable increase in its lending activity is visible.” NKR Managing Director Mikhail Doronkin adds that the bank is actively increasing the scale of project financing, thanks to which the portfolio of loans for housing construction at the end of 2022 is twice as large as the mortgage portfolio. “In addition, together with the parent organization, he takes part in the development of a mechanism for preferential financing of infrastructure for housing and urban development, which also supports the growth of corporate business in the profit structure,” the expert adds.

At the same time, despite the obviously construction and housing focus of the bank, last year it was by no means the most specialized assets that grew at the fastest pace. The bank’s total assets increased by more than 100% to RUB 1.8 trillion. However, the highest growth was shown by “liquid assets, including securities” – by 164%, to 682 billion rubles. As follows from the comments of the bank, the growth occurred in the framework of “treasury operations to manage the balance sheet.” Project financing of housing construction showed an increase of 95%, to 635 billion rubles, mortgage lending increased by 47%, to 319 billion rubles, another 143 billion rubles. accounted for “other loans and borrowings.”

It is noteworthy that the growth of assets was funded mainly by the funds of legal entities. Over the past year, the volume of client funds increased by 125% to 1.375 trillion rubles.

Moreover, the weakest dynamics was shown by funds on escrow accounts – by 40%, to 389 billion rubles, the strongest – funds of legal entities on accounts and deposits: by 239%, to 851 billion rubles.

As Dom.rf explained, “in order to maintain the pace of development and diversify funding sources, the bank has been actively working to attract deposits from corporate and retail clients since 2021.” According to reports, the amount of funds of individuals on accounts and deposits in the bank in 2022 increased by 68%, to 136 billion rubles.

According to experts, this approach is still justified, but carries risks.

“Bank Dom.rf is developing long-term, including infrastructure, projects,” notes Ilya Zharsky, managing partner of the Veta expert group. “Deposits and settlement accounts of legal entities, which make up the vast majority of client funds, in contrast to deposits of citizens or funds on escrow accounts , are more mobile and can be withdrawn at any moment.” In this regard, the expert emphasizes, funding long-term projects with dynamic money “does not seem like the best idea.”

Ksenia Dementieva