Russia’s top banks enjoy hefty net income growth

Today’s business daily Vedomosti reports on the financial results of the 30 largest Russian banks for the past year. According to the figures provided by the Russian Central Bank, combined net profit of the 30 largest Russian banks in 2012 increased by 20.4 percent compared to 2011, to 795.3 billion rubles (USD 25,3 billion). The combined net profit of all Russian banks in 2012 amounted to 1.12 trillion rubles (USD 37.3 billion), exceeding the Central Bank’s projection of one billion rubles. Within the group of the 30 largest banks, more than a third of combined net profit, approximately 440 million rubles (USD 14.6 billion), is attributable to Sberbank, the largest Russian bank.

However, Sberbank lagged behind the rest of the group in terms of net income growth with a 7 percent increase, while Bank Moskvy increased its net income in 2012 by as much as 45.3 percent, to 8.2 billion rubles (USD 273 million). Profit growth recorded by VTB24 (+27.91 percent, to 36,9 billion rubles, USD 1.23 billion) and Transkreditbank (+27.9 percent, to 15.4 billion rubles, USD 513 million) pales in comparison with a new addition to the group of the largest Russian banks – Hantiy-Mansiyskiy bank and its 1,400 percent net income growth (to 7.5 billion rubles, USD 250 million). Alfa-bank recorded the highest net income growth within a narrower group of the top five banks, almost doubling its income to 21.6 billion roubles (USD 720 million).

One of the analysts stated that the banks’ net profit growth in 2012 was mainly driven by a substantial increase in assets. Analysts expect that the combined net profit of the Russian banking sector will grow by no more than 5 percent in 2013 due to the continued high cost of funds and a reduced ability to generate profit by lowering provisions.

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