OREANDA-NEWS. Fitch Ratings has published the latest edition of the 'Russian Banks Datawatch', a monthly publication of spreadsheets with key data from Russian banks' statutory accounts.

The issue (available at www.fitchratings.com or by clicking the link above) includes:
- Balance sheet numbers as of 1 November 2015, as well as changes during October 2015 and since 1 January 2015
- Charts illustrating balance sheet changes in 10M15 for the main state-related, privately-owned, foreign-owned and retail banks

Fitch notes the following key developments in October 2015:

- Sector corporate loans nominally dropped RUB181bn (-0.5%), but grew RUB195bn (0.5%) if adjusted for a 3% rouble appreciation against the dollar in October. Notable real increases of corporate lending were in VTB (RUB92bn, 2%), Credit Bank of Moscow (CBOM; RUB62bn, 12%), Bank FC Otkritie (BFCO; RUB47bn, 2%), Gazprombank (GPB; RUB32bn, 1%) and JUGRA (RUB28bn, 13%).

- Retail loans fell slightly by RUB46bn (-0.4%) in nominal terms or by RUB35bn (-0.3%) if adjusted for FX effects. Among specialised retail banks, only Tinkoff grew 1.4%, while Russian Standard, Home Credit, Orient Express, OTP, Rencredit deleveraged by 1-4%. The loan book of the troubled Svyaznoy Bank contracted by 17%.

- Customer funding nominally dropped by RUB657bn (-1.4%) or by a more moderate RUB116bn (-0.3%) if adjusted for rouble appreciation. The latter figure comprised RUB122bn (0.6%) inflow of retail deposits and RUB238bn (0.9%) decrease of corporate funds. The increase in retail funding was mainly due to a RUB120bn inflow into state-related banks, reflecting continued flight to quality.

- The large decreases in corporate funding (excluding one-offs and FX effects) were in VTB group (RUB159bn, -3.3%), Unicredit (RUB63bn, -8.1%), Otkritie group (RUB43bn, -4.2%), Alfa-Bank (RUB39bn, -6%), and Citibank (RUB27bn, -12%), while notable inflows were seen at CBOM (RUB132bn, 26%, driven by deposits from a large corporate); ING Bank (RUB48bn, 27.8%), Promsvyaz (RUB47bn, 8.5%) and GPB (RUB41bn, 1.5%).

- Some banks' corporate funding numbers were distorted by one-offs, including i) a RUB92bn technical decrease related to a change of accounting treatment of government Tier 2 capital injections, which are now reflected off-balance sheet (which affected BFCO, CBOM, Novikom, and B&N Bank), ii) a RUB29bn decrease at Russian Standard related to a restructuring of its subordinated eurobonds and iii) a USD1.15bn (RUB73bn equivalent) increase in RusAg from subordinated debt placement.

- State funding nominally increased RUB32bn (0.4%) or RUB81bn (1%) net of FX effects. This included RUB250bn of repayments (mainly of rouble funding by Sberbank) to the Central Bank of Russia (CBR), offset by RUB216bn of borrowing (mainly by VTB) from the Ministry of Finance, RUB77bn from regional and federal budgets and RUB39bn from other government-related entities. The outstanding volume of CBR FX funding was almost unchanged in October at USD26bn, mainly used by BFCO (USD16bn), Alfa-bank and Russian Standard (both at USD1.6bn), Promsvyaz (USD1.2bn), CBOM (USD0.9bn) and Sovcombank (USD0.8bn).

- The sector reported a RUB72bn net profit in October (12% annualised ROAE), which would have been a lower RUB43bn (7.2% ROAE) if net of a one-off RUB29bn gain on subordinated debt restructuring by Russian Standard. Net of Sberbank's RUB34bn net profit the sector's recurring profit was close to zero. Considerable losses were reported by MDM (RUB6.8bn, or 17% of end-9M15 equity), Khanty-Mansiysk Bank Otkritie (RUB2.5bn, 7%), AK BARS (RUB2.5bn, 6%) and Investtorgbank (RUB2.4bn, 45%). Among retail banks only Tinkoff reported a moderate profit of RUB0.7bn; OTP was marginally above breakeven; Russian Standard, Orient Express and Home Credit showed moderate losses of, respectively, RUB2.9bn (-8%; adjusted for RUB29bn one-off gain on the restructuring), RUB0.8bn (-4%) and RUB0.4bn (-1%), and Svyaznoy lost a further RUB1.3bn, resulting in its equity becoming negative (today the CBR withdrew its banking license).

-The average total capital (N1 - 15.7%, current required minimum of 10% set to be reduced to 8% at end-2015) and core tier 1 (N1.1 - 10.9%, current required minimum of 5% set to be reduced to 4.5% at end-2015) ratios of the sampled banks (excluding those rescued or not publishing capital ratios) increased by, respectively, 39bps and 20bps, due to a decrease in FX-denominated risk-weighted assets following moderate rouble appreciation. The biggest increases of total capital ratios of 3.9ppts and 3.2ppts were reported by Sviaz-Bank and MDM, which received Tier 2 capital contributions in the form of OFZ government debt from the Deposit Insurance Agency of, respectively, RUB12bn and RUB9bn. RusAg also showed a 3ppts improvement in its total capital ratio due to RUB73bn of subordinated debt issued on the domestic market.

- CBR FX forbearance was previously extended to year-end, but the favourable USD/RUB exchange rate was increased to 55 from 45 (compared with the current market rate of around 65), with effect from October. We expect banks utilising the forbearance would report capital ratios 30-50 bps lower than if forbearance was eliminated.

- We estimate that current capital buffers (excluding future potential profits) of 54 of the sampled banks (excluding the already failed and bailed-out ones) were sufficient to absorb potential loan losses equal to less than 5% of loans, and 14 could absorb less than 1%. The latter were VTB24, Bank of Moscow, Leto Bank, Globexbank, RosCap, Promsvyaz, MDM, Orient Express, Rencredit, URBiR, Novikom, JUGRA, Moscow Industrial and Rosinterbank.