The stock of outstanding bank loans to the real sector increased by 1% m/m in April after growth of only 0.1% m/m in March, according to preliminary figures published by the CBR. This is after adjustment for exchange rate changes, while the unadjusted metric shows 1.3% growth in April. Both household and corporate lending increased by 1% during the month, the first supported by a recovery of mortgage lending and the second by higher lending to large companies. The revival of bank lending is supported also by some decline in interest rates, the CBR said. The quality of corporate loans improved during the month as the share of overdue loans decreased to 6.7% y/y from 7.1% y/y in March, while for household loans it remained unchanged at 8.1%. Despite the recovery of lending, total bank assets contracted by 0.2% during the month and are down by 0.7% y/y.
On the deposit side there is a decline of 1.7% m/m in adjusted terms, which was mainly on account of forex-denominated corporate deposits. Deposits of households were up by 1% during the month despite falling deposit rates. Deposit dollarization continues to fall reaching 31.2% for total deposits and 22.5% for household deposits. Profit of the banking system reached RUB 553bn in the four months of the year, well above the RUB 167bn in the same period of 2016. In April alone the banking system posted RUB 214bn profit, the highest monthly level this year.