Absolut Bank
Ravil NIGMATOV, director of the strategic and organizational department
In 2012 the assets of the banking sector grew by 18.9%. The major contribution was made by the corporate lending (6% contribution into the growth of the banking sector's assets). The second place was occupied by the retail credits (+5.3%). However, meanwhile the retail lending was accelerated in 2012, the corporate one slowed from 26.6% in 2011 down to 13.7% in 2012.

Resulting from 2012 the best results in retailing sector were traditionally shown by the credit card lending. The credit cards portfolio grew by 86% (as against 70% for 2011) during the examined period. In the first line it is connected with the fact that the credit cards are actively advertised by the banks and people start to feel the advantages of the product. The consumer lending also showed dramatic growth rates: the annual growth of the pledge-free loan portfolio made 43% in 2012. The third place by portfolio growth was occupied by mortgage area (growth by 30% in 2012 against 25% in 2011).

As noted above, the corporate sector faces a slowdown. On the one hand, it relates to the gradual saturation of that sector by credit resources: presently the share of corporate loans in the Russian GDP is higher than on average in Europe. On the other hand, the loans became less available due to the increase of interest rates and the banks started making a more prudent policy when lending to individuals as the non-payment risk from enterprises went up.

Decrease of the corporate lending affected namely the production industries such as processing, production and distribution of electric power, gas and water, agriculture. The share of loans to the processing sector went down in the aggregate volume of the corporate lending from 14% in 2011 to 12% in 2012. The share of loans to the companies as engaged in production and distribution or electric power reduced from 4% to 3%. Such trend is justified by the industrial production index data: the index growth in 2012 was only 2.6% against 4.7% in 2011.

While the industrial production and agriculture lending share went down, the share of minerals extraction, construction, transport, wholesale and retailing went up. It is connected with the lower risk for the above types of activity (lower dependence on the domestic industrial production, greater support of the state), whereby the banks were desirous to issue loans to the said sectors.

URALSIB Capital
Alexei DEVYATOV, chief economist
The banking sector in the Russian Federation showed quite hefty growth rates in 2012. Thus, the growth of the retail loan portfolio upon results of the year was 39.4%, alongside the corporate loan portfolio was meeker - 13.7%. Such a difference is mainly stipulated by a significant credit burden in the corporate segment: as of the beginning of the current year the volume of corporate loans reached RUR 20.9 trillion roubles making 33.4% of the Russian GDP. It is quite an intensive burden, however it is substantially lower than in most of developed countries on both sides of the Atlantic Ocean. Therefore we see good opportunities for the corporate portfolios of domestic banks to grow.

Nevertheless, the retail crediting will be the most dynamically growing sector for a couple of forthcoming years. On the one hand, it is stipulated by a lower credit burden on population: the retail loan portfolio as of the beginning of the year made RUR 7.7 trillion making only 12.3% of the Russian GDP. Such level of the credit burden testifies to the people's having a considerable unsatisfied demand for the loans. On the other hand, a sustainable growth of real earnings of the Russians (for 4.4% in 2012) facilitates the advance of the consumers' surety that is manifested in the growth of demand for the large purchases and maintains the development of the retail lending.

However, there are factors that impede the development of credit processes in the Russian Federation. For example, the effect is drawn by the slowdown of the economy's growth rates, which had a special manifestation in the first quarter of the current year. It results in the appearance of uncertainty in the banking area as for future profit and possibility to serve the loans, which, in its turn, hampers the growth of corporate lending. Thus, meanwhile in the beginning of the last year the corporate portfolio's growth rates made 27%, they went down twice by the end of the year.

People are also anxious about the condition of economy: we observe their anxiety both through the moderate decrease of the retail lending growth rates and through increase of the bank deposits from citizens. Historical data show that every time the economic conditions become poorer, people response with augmentation of savings dor a rainy dayD Nowadays people have trust to the banks, which is confirmed by the incremental base of deposits in the banks.

The growing uncertainty in economy is reflected through increase of rates both on corporate, and retail loans. The rates' increase was indirectly supported by the monetary-lending policy of the Central Bank of the Russian Federation, which focused its efforts on counter-acting the inflation since the last year's autumn. We expect that inflation will start decreasing already in autumn this year making it possible for the Central Bank of the Russian Federation to abate the key rates, as well as to soften the access to the liquidity for the banking system, and to make the credit rates lower.

External factors do affect the macroeconomic situation in the Russian Federation and the quality of assets too. For instance: it is the intensification of the crisis in Europe being the major export market for Russia. Currently the Russian economy is in the lowest point of the business cycle, and we expect the growth rates' escalation. Acceleration of the economy will be connected with [excitement Din Europe which is going to be assisted by the growth acceleration policy due to leaving the strict economy measures. Therefore an improvement of the foreign economic conditions and moderate abatement of the monetary-credit policy in autumn this year will help the Russian economy and cause the upturn of the consumers' surety, which will support the high growth rates of lending.

Bank of Moscow
Stanislav BOZHENKO, head of the Loan portfolio management department
From the point of view of growth rates, the undisputable leader in 2012 was the retail lending (growth of about 40%). The volumes of crediting to the corporate sector were substantially behind; the growth in comparison with 2011 was quite plain: about 15%.

Popularity of retail credits among the people was in the first line caused by the beginning of certain economic stability: people are more assured about the future. Consequences of the 2008­2009 economic slowdown are almost forgotten by most of people. It is vital to mention the growth of the real earnings of the Russians in the last year (+4.2%) which fact also gave a stimulus to the development of the credit market.

It is natural that along with positive factors there were negative ones affecting the development of situation in the Russian banking sector. Such factors included the systemic problems of the global economy. Last year (as well as today) the major QmnoyerD is the EU economy. Among the local Russian factors that suppress a more dynamical growth mainly of the corporate lending, one should single out the shortage of long-term liabilities with the Russian lending entities, as well as the necessity of the overall extra-capitalization of the Russian banks.

ALfa-Bank
Marina KARAPETYAN, anaLyst
The 2012 banking sector grew up mainly due to the lending, still there were other factors as well: the Central Bank gave more liquidity to the financial-lending entities in order to maintain the economic growth. During the crisis of 2008 the crediting encountered quite a severe slowdown, so last year the banking area had to catch up with the lending growth at a quickened pace.

Currently we observe the slowdown again. It can be explained by the fact that the companies which were in need of credits had already received them and made the investments into their projects. Seeing the slowdown of the economy, they do not wish to develop new projects as they need to complete the old ones. Potential borrowers are not desirous to take the debt burden, and at present they prefer financing the new projects out of their own funds. The companies being in need of loans cannot afford getting them due to the high interest rates. Of course, the banks do not want to Btep onD their profit and reduce the rates so that the borrowers could afford applying for the loan. In addition, there is a high level of risks which also refrains the financial institutions from reduction of rates.

As regards other factors which had adverse effect on the growth dynamics in 2012, they are above all the lack of liquidity in the banking sector and inadequacy of capital. In 2013, undoubtedly, a negative effect on development of the Russian banking business will be caused by adoption of Basel III. The financial institutions will have to slow down their lending rates a bit due to the Central Bank's policy, because of the new capital adequacy standards.

Bank Saint Petersburg
Olga LAPSHINA, head of the debt market analysis area
According to the data of the Central Bank of the Russian Federation, the aggregate growth of assets in the banking sector made 18.9%. It is quite a good parameter, however the 2011 growth was better (23.1%).

In order to outline the major factors specifying such dynamics of the parameters, one should remark the following: growth rates for lending to companies made 12.7%, meanwhile the growth rates for lending to individuals - 39.4%. The reduction of the people's saving activity made it possible to achieve such impressive results on consumer lending. Consequences of the 2008 crisis are somewhat forgotten, meanwhile the par value salary growth rate for people was substantial (13.9%) in 2012. Besides, subject to the existing estimates, the level of credit debts of the Russians in respect to annual revenues makes approximately 20%, which testifies to a low credit expansion. In order to have a comparison one has to take into account that in Europe the population's credit burden parameter is about 100%. It is an extra positive factor for future dynamics of consumer lending in Russia.

If we speak about the major negative factors in 2012, they should include, in the first line, a shortage of capital affecting the system almost throughout the year. As a result many banks could not increase the loan portfolios in the middle of 2012, when the companies' demand for credit resources was higher than in autumn 2012. During the whole year, the banks' equity went up by 16.6% against the assets' growth by 18.9%. It led to the reduction of the capital adequacy parameter for one percentage point. This problem was especially dramatic in summer and early autumn: thus, more than a half of funds as raised by the banks into the capital were raised in the fourth quarter of 2012. The capital adequacy difficulties occurred due to closure of external markets, which had been caused both by escalation of EU problems and by the record-breaking profit of the banking system gaining more than three trillion roubles for the year.