S&P: Net profit of the banking system of the Russian Federation in 2018 will amount to 1.2-1.3 trillion rubles
The net profit of the banking system of the Russian Federation in 2018 will amount to 1.2-1.3 trillion rubles for the company on the condition that banks will not suffer significant losses, predicts the international rating Agency S&P Global Ratings (S&P). S&P: CB in 2018 can send up to 1 trillion rubles for capitalization of banks subject to rehabilitation
“According to our forecasts, the net profit of the banking system in 2018 will amount to 1.2-1.3 trillion rubles on national accounting standards, provided that the banks will not suffer significant losses, comparable to the volume of losses for 2017. However, as we noted in 2017, as reflected in the financial statements the earnings of some banks may be significantly overstated due to inadequate evaluation of their assets and recognition of losses for past years”, – stated in the review of the Agency.
In 2017, the aggregate amount of reserves for possible losses on loans of the Bank “Otkrytie”, Bank “trust”, PSB PSBR, “Growth Bank” and the Bank was almost 930 billion rubles, or about 60% of the total of reserves for possible losses on loans to the 30 largest banks, the Agency said.
“In this regard, we carefully assess data reporting of several major Russian banks reserves for possible losses on loans. As a result, we do not exclude the possibility that in 2018 the actual performance of the 30 largest banks may again differ significantly from the predictions of our baseline scenario, if some major banks will have to create significant reserves,” notes S&P.
According to analysts of Agency, in 2018, the indicators of net interest margin the largest Russian banks will remain generally stable and will be close to the level of 2017. However, since the second half of this year, and in 2019 is expected and pressure on margins of banks. “According to our estimates, net interest margin reached 4.7% at the end of 2017 (according to IFRS), and, most likely, will drop to 4% by the end of 2019”, – stated in the review.
Interest rates on deposits in 2018, will be reduced against the background of the expected reduction in the key rate of the CBR.
“In our opinion, the relatively stable economic situation and lower interest rates can lead to an approximation of parameters of credit losses to the average over the economic cycle. We expect that in 2018 the average volume of newly formed provisions for possible losses on loans from major Russian banks stabiliziruemost at around 2-2,5%… We expect that new reserves for possible losses on loans will remain moderately negative factor for the indicators of capitalization and profitability of banks in 2018-2019 years”, – specifies the Agency.