The CBR has published November interest rates statistics for corporate loans and retail deposits for up to one year (excluding Sberbank). Loan rates increased 20bp MoM to 10.3% and retail deposits rates were also up, rising 10bp MoM to 8.2%. Nevertheless, the spread widened 20bp MoM to 3.2%.
This was in line with expectations, as still tight liquidity and high competition for deposits pushes interest rates up, while the increase in rates for corporate loans signals banks’ are attempting to transfer pricing to clients, which is currently limited on the back of weaker corporate demand. Meanwhile, we expect pressure on NIM to be high in December, as statistics for the maximum retail deposit rates at the Top-10 largest retail deposit taking banks suggest a further increase of some 9bp from the end of November level. Furthermore, high competition for funding also pushes up corporate deposits rates. NIMs are still our key concern for the Russian banking sector, as we see pressure from the high cost of funding in 4Q12 and 1H13, while the liberalisation of the local bond market and potential CBR monetary policy easing next year will likely squeeze banks’ NIMs further.
Mikhail Shlemov, Svetlana Aslanova
VTB Capital analyst
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