Yuan enters banking assets

There is a growing number of banks on the market that are ready to lend in yuan. Those who launched yuan deposits are moving to active operations in this currency. Sberbank, which started lending in September, disclosed preliminary results, noting an increase in demand “by tens of percent per month.” A number of other banks also report significant interest in the products. However, experts consider the prospects of the instrument limited.

Sberbank announced that its portfolio of loans to companies in yuan reached 4 billion CNY (in terms of rubles at the rate of the Moscow Exchange – 39 billion rubles). “The demand for them is very high, and it is constantly growing. From month to month it increases by tens of percent,” said Alexander Vedyakhin, First Deputy Chairman of the Board of Sberbank. The bank noted that mainly lending in yuan is in demand by large businesses that are engaged in exports.

Experts call Sberbank’s practice of lending in yuan “limited.”

“This is more of a market exploration so far, rather than stable volumes,” says Yuri Belikov, managing director of Expert RA. In his assessment, it would be difficult to raise a commensurate amount of yuan-denominated funds from retail customers to fund such a volume of lending. Only if these are not VIP clients with large balances, the expert notes.

Other banks also announced plans to lend in yuan (see “Kommersant” dated September 7). Yes, head VTB Andrei Kostin said in September that the bank was considering the possibility of launching lending to companies in yuan before the end of the year. The bank did not answer “Kommersant”. AT Alfa Bankwhich launched lending in April, notes “increasingly active demand from exporting customers” for loans in yuan.

CFO Expobank (lending started in September) Ernst Becker points out that so far only 5% of the bank’s assets have been placed in yuan loans. “The transition to settlements in yuan has formed a specific market for this currency in Russia. Companies and individuals, on the one hand, have balances in yuan, on the other hand, there is still a need to replace foreign currency loans in dollars and euros, the rate for which has historically been lower than the lending rate in rubles, ”the report notes. Bank “Zenith” (the first credit tranches were issued in December). At present, the level of lending rates in yuan in the bank is up to 5.5% per annum.

Sovcombank this year, I managed to sign several framework agreements with the possibility of providing financing, including in yuan, said Rostislav Kulak, head of the department for working with the corporate and financial sector of Sovcombank. “So far, it is more profitable for our clients to place yuan bonds, since in terms of terms they are aimed at raising funds for a period of three years or more, which is not yet available for lending,” he concludes.

All the banks listed above have deposits in yuan in their lineup. In particular, Sberbank has a maximum rate of 1.07% per annum for a three-year period and with an amount of 1 million yuan, Alfa-Bank for mass customers has 1.73% for a two-year period, VTB and Zenit Bank each have 0, 75% for a period of about a year, Expobank – 0.5%.

However, for other banks lending in yuan does not yet look too attractive, Yuri Belikov believes. “In the medium term, transactions in yuan will go to banks with a negative interest margin (when interest expenses exceed interest income.— “b”), simply because there are not so many retail clients on the market that banks can raise funds in yuan cheaply and in large volumes and, accordingly, place them profitably,” the expert explains.

There are also high risks that in the future, from the point of view of closing the currency position, assets will have to be covered by funds from interbank lending.

“Given that while the volume of lending in this currency is limited, no one is thinking about the margin yet, but they are doing it rather for the future, probing the demand for loans in yuan. The latter largely depends on how quickly and effectively we will integrate with Asia,” Yury Belikov clarifies. So far, he believes, it is too early to say that there is a steady demand for loans in yuan from corporate clients.

Olga Sherunkova