Experts expect growth in reserves from banks
Specialists conducted an analysis of cases in the banking system. According to them, by the end of the year the share of non-performing and bad loans will increase by 13%. This situation, in its turn, suggests that it is necessary to increase reserves. Experts expect that by the second half of 2021 reserves of banks will increase by 375 billion rubles.
Financial institutions in Russia are still unable to recover from the pandemic and the collapse of the national currency. They continue to bear losses on retail loans, which affects the quality of the whole sector. To reduce damage, banks have to save more capital in the reserve. According to analysts, such reserves should be created in the amount of 375 billion rubles, they should be completed by July this year.
The quality of the loan portfolio depends on the state of the sector of unsecured consumer lending. Since March last year, the share of loans overdue for repayment of 90 days or more, increased by 0.9 pp and by July was already 8.8%.
Russian banks restructured their retail sector in the first half of 2020 at RUB 625 billion, reaching RUB 734 billion by the end of the period. The level of reserves is 6.7%.
According to information from the Central Bank of Russia, about 70% of all requests for credit vacations and about 73% of requests for restructuring, relate to credit cards and consumer loans. However, financial institutions have not approved about 40% of such requests for restructuring, which is about 180 billion rubles. According to experts, we should expect that in the near future such loans will become non-performing.
After quarantine restrictions in 2020, the banking segment began to come to life in June. Then, in just one month the income of Russian financial institutions increased to 70 billion rubles. This figure is lower than the same period in 2019, but 140 times higher than in May.
However, analysts were cautious about these results. They assume that the increase in profit was due to a reduction in the volume of reserves, which then had to be increased again.
Lending, which stopped during the pandemic, by the end of summer again showed growth dynamics. Government support programs are helping to increase mortgages, retail loans are also recovering, although not as quickly as we would like. It should be noted that the credit segment is associated with the development of the economy and its stability. Once the situation in the country is as predictable as possible, loans will grow, especially on the part of business.