Training on banks and NBCOs, January 24–25

Stagnant net interest margin to hold back creditworthiness of Russian banks

Analysis of NIM dynamics in the Russian banking sector

  • After recovering post 2014-2015 crisis, net interest margin of Russian banks is sluggish. According to ACRA estimates, net interest margin (NIM) of the Russian banking system calculated on the basis of IFRS reporting recovered to 4.5% in 2016 after falling to 3.8% in 2015 (versus a five-year record of 5.6% registered in 2013). The growth continued in 2017, but NIM failed to get back to pre-crisis level, which, in ACRA’s opinion, is an element of a long-term trend for stagnation of banking business returns at the current low level.
  • NIM may start a gradual decline in 2018. We expect NIM to decline to 4.5% in 2018, i.e. returning to the 2016 level. Weak post-crisis recovery of NIM in 2016-2017 and its expected decline in 2018 are indicative of a quite rapid transition of the banking system to a “new normal”. Such state of the economy exhibits low inflation (versus historic figures), interest rate cuts by the Bank of Russia as well as comparatively low lending and deposit interest…

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To clarify the cost and terms of payment, please contact Maksim Ivakaev

phone: +7 (495) 139 04 80, доб. 164, email: maksim.ivakaev@acra-ratings.ru

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