Banking Sector
The banking sector is the key component of the financial system. Credit institutions conduct settlements, ensure the safeguarding of clients’ funds in bank accounts, and transform these funds into loans to the economy.
Banks and non-bank financial institutions offer financial services to clients based on banking licences issued by the Bank of Russia. There are two types of banking licences in the Russian Federation: a universal licence issued to banks whose equity exceeds 1 billion rubles, and a basic licence for banks whose equity ranges from 300 million to 1 billion rubles. A basic licence provides for simplified regulation, but it also involves a number of restrictions. Two-thirds of the banks in Russia hold universal licences (they account for over 95% of total assets in banking), while the remaining banks have basic licences.
Raising funds from clients, credit institutions undertake obligations to creditors and depositors; therefore, there is a range of requirements established for banks, namely those stipulating the required ratios. The Bank of Russia exercises continuous supervision over credit institutions to ensure their compliance with the applicable laws and, where necessary, removes banks from the market if their operations jeopardise the interests of creditors and depositors.
Russia also has a deposit insurance system in place protecting depositors’ interests. It covers the funds of consumers, individual entrepreneurs and small businesses. Most banks have joined this system, and the maximum insurance coverage established by the system amounts to 1.4 million rubles, including interest accumulated.
In Russia, the ratio of bank assets to GDP is approximately 90%. Over one-half of credit institutions’ assets is accounted for by loans, of which two-thirds are corporate loans and one-third is retail loans. Bank liabilities are dominated by the funds of clients—businesses and individuals.
Assets (trillions of rubles) and percentage of indicators in assets
Corporate, retail and interbank loans include acquired claims.
Corporate loans include loans to general government. Interbank loans include accrued interest.
Sources: Reporting Forms 0409101 and 0409110.
Liabilities and balance sheet capital (trillions of rubles), percentage of indicators in liabilities and balance sheet capital
Sources: Reporting Forms 0409101 and 0409110.
Corporate loans include loans to general government. Corporate and retail loans include acquired claims.
Companies’ funds are adjusted for the amount of Eurobonds issued by banks and factor in adjustment accounts according to IFRS 9.
Individuals’ funds are shown net of funds in escrow accounts.
Net profit as of the end of the first six months of 2023.
Sources: Reporting Forms 0409101 and 0409110.