Financial Sector Overview
Bank of Russia
RUSSIAN MACRO UPDATE
The Central Bank of the Russian Federation
FINANCIAL STABILITY
Macroprudential policy aimed at Identifying and preventing potential systemic risks
Credit activity
As the pace of recovery remains inconsistent across lending segments in Russia, credit-to-GDP gap for
both corporate and retail lending difference between the actual credit-to-GDP ratio adjusted to
currency revaluation, and the long-run trend) is still estimated as negative. This shows that lending
remains below the long-term trend.
Retail lending risks
Unsecured consumer lending continued to grow at a high pace. Outstanding loans increased 25.3% in
year-on-year terms in April 2019 to the amount of RUB 7.9tn. The Bank of Russia's Board of Directors
has decided to increase add-ons to the risk weights for unsecured consumer loans bearing an
effective interest rate of 10-30% by 30bps for loans extended from 1 April 2019.
Mortgage loans grow at a steady rate, however, borrowers' debt burden remaining at the same level
shows that the current growth does not present any significant risk to the financial stability. The Bank
of Russia aims to prevent the build-up of risks related to loans with a high loan-to-value ratio, thus the
risk weights for such loans issued after 1 January 2019 were raised from 150% to 200%. These
measures are aimed at sustainable development of the mortgage lending segment.
Capital adequacy
The capital adequacy (Basel III N1.0 ratio) for the banking sector remains at comfortable level of
12.1% as of 1 May, 2019.
Decision
The Bank of Russia's Board of
Directors has decided to keep the
countercyclical capital buffer (CCB)
rate for Russian credit institutions at
0% of risk weighted assets
Rising risk weights for specific credit requirements results in banks increasing their capital
reserves to cover potential losses. Therefore considering the uneven recovery of lending,
there is no need for a positive countercyclical buffer for credit institutions yet.
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