FC Otkritie Bank became the leader in losses in October

Bank FC Otkritie unexpectedly took first place in terms of losses at the end of October, its reporting shows. This is not the first time that RSHB has been included in the list of unprofitable banks at the end of the month. Despite the high incomes of other players, their further growth will be restrained, and one of the reasons is the Central Bank’s continued tough fight against risky lending.

As follows from 101st reporting formwhich Kommersant studied (published by the Central Bank on November 27), in October two systemically important banks were included in the list of unprofitable banks, and one of them even topped it.

According to Kommersant’s calculations, FC Otkritie became the leader in losses in October, receiving a negative result of 10.55 billion rubles.

Rosselkhozbank (RSHB) received 4.6 billion rubles. net loss for the month and took third place in the anti-rating. However, both banks are in the black with an accumulated total: Otkritie FC earned 39.4 billion rubles in the ten months of 2023, RSHB – 29.6 billion rubles. The banks did not respond to Kommersant’s request.

At the end of October, the top 3 most profitable banks included the bank of non-core assets Trust (30.4 billion rubles; this is higher than the profit in each of the previous four months) and Raiffeisenbank (14.05 billion rubles, which is comparable to result of September). Sberbank traditionally took first place, its net profit amounted to 133 billion rubles. Sberbank, when publishing its results, reported: “The positive dynamics are due to business growth.” The Trust indicated that the profit “was generated as a result of the sale of assets in the reporting period and the revaluation of assets at fair value.” Raiffeisenbank did not respond to Kommersant’s request.

There have been changes in the top 5 banks in terms of profit. According to the results of January-October 2023, Sberbank was behind with a result of 1.3 trillion rubles. profits go to Gazprombank (177 billion rubles), which, in turn, displaced VTB to third place (173 billion rubles), followed by Raiffeisenbank (107 billion rubles) and Alfa Bank (94.2 billion rubles). The analysis in this case was carried out for those banks that disclose their statements, with the exception of PSB, SMP-Bank, RRDB and Peresvet, detailed information about the financial indicators of which is not disclosed, as well as Mosoblbank, whose statements did not appear this year.

Net profit of the banking sector declined for the second month in a row, falling below RUB 300 billion. back in September (296 billion rubles) and amounted to 256 billion in October.

Experts cannot draw detailed conclusions about the causes of losses for specific banks based on the current reporting format. However, if we talk about the sector as a whole, the head of the department of internal audit and risk management at FBK, Roman Koenigsberg, among the key factors that could influence the financial results of banks in October, notes a significant strengthening of the ruble and an increase in interest rates after the increase in the Central Bank’s key rate. Among the key factors influencing profits, the expert highlights the tightening of the Central Bank’s lending requirements: “For some, this could lead to a decrease in loans, thereby increasing the effect of a reduction in the revenue base associated with a decrease in demand for more expensive loans.”

As for the increase in expenses on deposits, for some banks the increase in interest rates on deposits could, on the contrary, create a short-term positive effect from the fact that depositors terminated previously concluded deposits ahead of schedule in order to reissue them at higher rates, Mr. Koenigsberg believes. “The interest lost by the depositor is included in the bank’s income in the month of termination of the deposit,” he explains.

Further, bank profits will be influenced by the same regulatory restrictions. According to the managing director of the Expert RA agency, Yuri Belikov, in November-December the financial result will be constrained by a slowdown in retail lending: “In December, a traditional seasonal recovery in consumer lending is possible, but, most likely, the seasonal demand driver will not fully compensate for the tightening of regulation, the reduction in the purchasing power parts of demand and increased rates.”

But at high interest rates, the absolute margin of banks is usually higher than at low interest rates, Mr. Koenigsberg concludes: “It will soon be clear whether bank clients are ready to take out loans at new high rates and bring additional profit to banks.” According to Mr. Belikov, in November-December the rate of profit generation is expected to slow down relative to the average monthly level (based on the results of ten months, it is 292 billion rubles).

Olga Sherunkova