Assets at Bank Rossiya, which was hit the hardest by US sanctions in March, declined Rub 33 bln, or 7%, to Rub 421.1 bln in March. On the whole, as Banki.ru analysts believe, American sanctions imposed on Russian banks did not undermine their financial standing.
“As of the lending institution’s liabilities, enterprises and institutions withdrew over Rub 34 bln from their accounts (or 10% of the aggregate amount). Both Russian and foreign concerns experienced cash outflows," Ramil Sharapov, an expert at the news service at Banki.ru, commented, adding corporate funds account for over 70% of the bank’s liabilities. Also, less than 10% fall to retail deposits, and households withdrew over Rub 2 bln from the bank’s accounts.
The bank holds a solid liquidity cushion (high-liquidity assets account for over 13% of the assets). The bank replaced the loss of corporate funds with the money borrowed from the Bank of Russia (against collateral of a portion of its securities portfolio). At the same time, the bank slashed deposits at banks, especially overseas. In the aggregate Bank Rossiya withdrew more than Rub 94 bln from banks.
As the Banki.ru analyst noted, this dragged down instant (№ 2) and current liquidity (№ 3) ratios from 55.35% to 35.22% and from 90.77% to 65.56%, respectively (minimum indicators for № 2 and № 3 are 15% and 50%, respectively). The lender’s capital adequacy ratio fell from 11.31% to 10.88% (the minimum threshold is 10%). During the difficult month the bank also boosted lending of non-resident companies (by nearly Rub 15 bln) and purchased rights of claim (up Rub 25 bln). Notably, Bank Rossiya sold bonds of foreign issuers for over Rub 17 bln, thereby cutting a relevant portfolio to Rub 2.9 bln (these securities were used to obtain funds from the Bank of Russia under repurchase transactions).
The US Department of Treasury added Bank Rossiya on the list of sanctioned institutions in March. The blow was also struck to Bank Rossiya’s financial subsidiary, Sobinbank, and SMP Bank, a bank owned by the Rotenberg brothers. In the upshot, US financial institutions, international payment systems Visa and MasterCard in particular, ceased to process bank cards held by the clients of said Russian banks.
To remind, after being added to the Department of Treasury’s list of sanctioned banks Bank Rossiya said it would cease all currency settlements. At present, the bank intends to focus on the domestic market and shut down all correspondent accounts at foreign banks.
Sobinbank and SMP Bank also experienced an outflow of client funds from their liabilities. At Sobinbank clients took back over Rub 2 bln (businesses withdrew Rub 1.3 bln of this amount), while households took home Rub 10.7 bln at SMP Bank, while businesses raised the bank’s liabilities by Rub 24.4 bln to Rub 65.7 bln (in all, more than 31% of liabilities). As a result, SMP Bank turned out to be one of five banks which reported the highest growth in corporate funds in the banking system. At present, retail deposits account for 32% of SMP Bank’s liabilities. All in all, SMP Bank ramped up assets in March (up Rub 32.5 bln to Rub 209.9 bln), while Sobinbank added Rub 407.9 mln to Rub 58.03 bln. Separately it should be noted that Sobinbank’s current liquidity ratio approached the 50% threshold (53.7%). Sobinbank managed to replace an outflow of client funds with inter-bank loans for a total of around Rub 4 bln, in particular, credit lines for the bank were opened at its parent institution, Bank Rossiya. Presently, both Bank Rossiya and its subsidiary, Sobinbank, are scaling down operation with currencies, including by reducing currency deposit accounts.
