On Friday, First Deputy Chairman of the CBR Alexey Simanovsky said that the regulator expected the sector loan portfolio to grow at the same pace in June as it did in May. To recap, in May the loan book expanded 2.7% MoM (corporate increased 2.3% MoM and retail gained 4.0% MoM). However, excluding the FX effect of the 11% RUB devaluation, the portfolio grew 0.8% MoM (corporate declined 0.1% MoM and retail was up 3.6% MoM). He also said that the CBR was concerned about robust retail book expansion at some banks, and called for a reasonable approach to building portfolios.
The CBR’s estimates support our view on economic growth decelerating and although the retail book continues to see strong growth, we consider that a slowdown is imminent. The seasonal easing in lending activity in July-August will, in our view, be followed by muted lending growth in the autumn amid macroeconomic headwinds in both the corporate and the retail segments. We expect that by YE12, the total growth rate will have declined to 20% YoY, from 29% YoY in May.