In may, the savings Bank managed to significantly increase net profit compared to the previous month due to higher interest and Commission income as well as savings on payments to the Deposit insurance Fund. The savings Bank continues to increase its loan loss provisions for five months, their volume reached RUB 1.4 trillion, the largest Conservative policy of the Bank in respect of reservations will serve as a benchmark for the entire sector, analysts say.In may, Sberbank has managed to reverse the negative trend in the net profit. At the end of the month it amounted to 45.1 billion rubles, exceeding the result of the April (11.5 billion rubles) is almost four times. Compared to the previous year in the reporting month, the Bank’s profit decreased by only 41%, while in April the decline in annual terms amounted to 85%. As pointed out by the analyst of Gazprombank Andrey Klapko, the monthly growth was supported by Commission income from transfers. The figures for lending in may was ahead of April: in just the past month to retail customers loans to 197 billion RUB compared to 166 billion rubles. However, the retail portfolio grew by only 19.4 bn, up 7.4 trillion Corporate customers of the Bank during the month issued 825 billion rubles (834 billion roubles in April), while the corporate portfolio declined by 0.1 percent to 14.2 trillion may result could be much more modest, as the Bank acknowledged “the total loss from modification of corporate and retail loans in the amount of 12.5 billion rubles incurred during restructuring”. However, due to the reduced costs of contributions to the Deposit insurance Fund (savings amounted to 12.3 billion rubles) managed to offset this loss.The situation in the economy forces lenders to adhere to the precautionary steps. “Despite the positive signals, the Bank continues to maintain a conservative approach to forming provisions for credit risk”,— commented the Bank’s performance Deputy CEO Alexander Morozov. In may, it created reserves of 63.4 billion rubles in April — 63.3 bn RUB Indicators of the savings Bank, the company generally reflect the overall situation in the banking sector. “April, may shock months for the economy. The dynamics of most indicators reflect our basic expectations for the Russian banking sector in 2020”,— said the Director of the direction “Financial institutions” S&P Sergey Voronenko. According to the Vice-President of Moody’s Olga Ulyanova, the most interesting and seem to be justified extrapolation to the entire banking sector the results of the largest Bank in terms of revenues and credit losses. The more that the peak of creation of reserves in the banking sector has not yet passed, analysts say. The evaluation of Mr. Voronenko, total expenses on creation of reserves will be “about 3% of the average gross loan porthele of the year”. In this case, Ms. Ulyanov notes that banks have the right to apply temporary relief of the Central Bank to reserve a portion of restructured loans. Until September 30, banks are allowed not to deteriorate the quality category loans to borrowers that are directly affected by the pandemic, and not to accrue additional reserves. “Those banks that, using breaks, now do not accumulate sufficient reserves, after September 30, may face a sharp increase in credit losses”— the expert assumes.The negative impact of additional reserves on the profitability of banks may be partially postponed to the end of 2020 — early 2021. This will smooth out the sharp one-time decline in capital stock. However, he expects the S&P, the profit of the banking sector for the year to decline by no less than doubled, from 1.7 trillion rubles 850 mln rubles Olga Cherenkova
