Assessment of the state of the Russian banking system

[DARPA]

The scale of the destructive actions of the Central Bank of the Russian Federation on the economy and the banking system of Russia is incredible, and the negative effect comprehensive.

This uncontrollable collapse of the ruble in 2014 and the consequent record since 1998 inflation.

This is undermining confidence in the national currency of all institutional units (the population in the first place, and banks). Too much time is needed to make the people and companies have started to reduce foreign currency deposits, but so monstrous collapse of the ruble again raises questions as to how safe the ruble. This in the long run will lead, at least in support of the high proportion of foreign currency savings, and thus to limit the development of the national financial system.

This series of belated, defective, and often simply stupid decisions in monetary policy, which led to not only undermine the credibility of the Central Bank, but also to the very high uncertainty among all participants of the Russian economy. This leads to excessive accumulation of foreign exchange reserves of the companies (dollarization cache) and inhibition of investment activity.

But the trash, of course, took place in the banking system. CB banged the Russian banking system is quite notable, and all the worst began after a whole series of acts of sabotage, starting from November 2004 to the end of December.


The sharp increase in the key rate in mid-December led to the paralysis of the banking system, the panic in the repo market, stop lending flight of deposits. Then everything fell. Completely paralyzed the interbank market, the spread between the interbank rate and the key rate of the Central Bank reached insane 13 percentage points that exceed the worst episode of the crisis of 2008. In mid-December as a result of severe crisis of confidence limits banks closed down on each other and on the interbank rate reached 30% 30 day loans.

Almost immediately fell debt and equity markets in Russia. Currency market crashed. Intraday fluctuations and volatility of the ruble surpassed all records.
In just one day, the Russian banking system has become bankrupt. Banks or other financial institutions that were not fully zahedzhirovannyh market positions are in a situation of negative equity (when current liabilities exceed the market valuation of all assets of the bank). If the foreign currency debt at the rate of lead, which was Tuesday, the system was on the brink of disaster, as many banks have shown a negative net balance (excluding losses from the collapse of the market). Then the CBR to not finish the banks decided to assess the position of the virtual currency (pre-crisis) course.

At the peak of the crisis, more than 800 billion rubles were withdrawn from deposits. It was the biggest bank run in the history of the Russian banking system.

Now credit and currency panic somewhat stabilized, the withdrawal of funds from deposits ceased (helped good rates on deposits and the expansion of coverage to 1.4 million). Spreads decreased volatility of the ruble fell. However, the destructive effects of sabotage Bank have far-reaching consequences ...

From the latest "achievements":

1. Russian banks fix the most extensive losses in its history, the second consecutive month. December losses 191.6 billion, 23.6 billion in January, ie, 215 billion for 2 months. That's a lot. In the worst of the crisis of 2008-2009, there was nothing like that. Details on the chart.
banki1
Losses due to three factors. Record creation of reserves for possible losses, foreign exchange losses and costs (the strongest decline in national currency from 1998) and debt costs due to the need to divert large-scale cash flows to repay foreign debts. Regarding the establishment of reserves for possible losses on loans.

2. In the month to produce 240-250 billion of reserves for possible loan losses (the record) that would hint at the scale of arrears on loans. Data for the end of January 2015.
banki6
Although the official statistics of delay, though rising, but not so critical, but this is due to the fact that banks prefer not to show the overdue loans on their balance sheets, which may adversely affect the ability to funding. The high rate of delinquency will signal the low quality of the loan portfolio, potentially block the ability to attract liquidity on acceptable terms. Banks are trying to refinance loans (mainly corporate). In this respect, delinquency statistics is not entirely objective, as base strongly underestimated due to objective reasons. But with reserves of more than understandable.

3. The rate of capital adequacy ratio fell to a critical minimum. Assets of Russian banks, the estimated risk-adjusted (loans, derivatives and securities) at the end of January 2015 amount to 68.4 trillion rubles.
banki2
Banks' capital - 6.82 trillion rubles. Norm of capital adequacy for the banking system at the end of January is 10%. This is the lowest level of capital adequacy since 1998. The average capital adequacy ratio for 2014 (before the collapse of the system, ie until October) was 12.9%. Over the past 6 years in the range of 13.8-15.8 walked%. In the worst of the crisis of 2008-2009 fell just below 14%.

4. The estimated capital deficit of the banking system at the current balance sheet figures is about 2 trillion rubles (at an annual profit of $ 1 trillion in the best of times). This year, well, if 300-400 billion will be shown. Many banks in danger of bankruptcy, especially smaller ones, who do not have centralized access to unlimited liquidity.

5. In Russia began deleveraging.
banki3
The scale of the reduction in consumer lending was the most significant in the history of the banking system in absolute terms. For loans in January 2015 decreased by 136 billion rubles in relation to December 2014. This is more than twice as much than in the crisis of 08-09. In percentage terms, the fall is comparable to the previous crisis.

6. The reduction not only in retail lending, but in the corporate - almost 120 billion per month. During the crisis, lending fell 08 60-80 billion per month. Height key rate has led to a predictable murder of the real economy.

7. Deposits of companies and the population are of great importance for the funding of Russian banks. Who deposits account for over 75% of all funding sources banks. The rest is almost entirely accounted for by the CBR.

But the increase in deposits ceased. During the year, the ruble money supply grew by only 2% (December 2014 to December 2013). It is very small. Typical growth rates in recent years is 15%.
banki4
In relation to the past, the population actually decreased deposits.
banki5
The situation was saved us that at the end of the year using the possibility of placing high stakes and placed more than 1 trillion rubles (per month)

As a result, we have the following: record losses of banks, the lowest in 15 years, the rate of capital adequacy, the deterioration of the quality of the loan portfolio (which is reflected in the growth of costs for provisions on loans), a large-scale reduction in lending (apparently the trend continues), stop the flow of funds to the ruble deposits (at the end of the year a record cut, and annual growth rates are the lowest since 2008).

As they say in such cases: dotargetirovalis, dopodnimali rates