The Bank of Russia sets national countercyclical capital buffer for banks’ capital adequacy ratios at 0.25 per cent of risk-weighted assets with effect from 1 July 2025. Accumulation of countercyclical capital buffer will improve banking sector resilience and will promote balanced credit growth.
Making its decision, the Bank of Russia Board of Directors relied on the following factors.
Alongside macroprudential add-ons, that are implemented in several credit segments (currently implemented for unsecured consumer loans, car loans and mortgages), macroprudential toolkit of the Bank of Russia includes countercyclical capital buffer1. Countercyclical capital buffer is accumulated during accelerated credit growth and released in case of crisis. Implementation of countercyclical capital buffer is aimed at increasing banking sector resilience to possible shocks and curbing their negative impact on lending to the economy. The Bank of Russia assumes that countercyclical capital buffer should be set at 1% of risk-weighted assets in the long-term.
The growth rate of lending to the economy by the banking sector remains high. The growth of unsecured consumer lending (25.6% YoY as of 1 August 2024) surpasses the growth of households’ income (16.8% in 2024 Q2 to 2023 Q2), growth of corporate lending (21.2% YoY as of 1 August 2024) is comparable to the growth of nominal GDP (19.5% in 2024 Q1 to 2023 Q1). According to
In 2023, banks’ profit amounted to 3.3 trillion rubles, however capital adequacy ratio (N1.0) in a year dropped from 12.7 to 12.2% due to fast credit growth and dividend payments in the amount of 865 billion rubles.3 For the first 7 months of 2024 capital adequacy ratio dropped from 12.2 to 11.2% regardless of profit in the amount of 2.1 trillion rubles earned by banks since the beginning of the year.
In a situation, when prolonged accelerated credit growth is accompanied by reducing capital adequacy ratio, the Bank of Russia decided to set a positive value of countercyclical capital buffer at 0.25% of risk-weighted assets with effect from 1 July 2025. Currently, most banks comply with capital adequacy ratio with a safety margin, therefore setting countercyclical capital buffer would have a minor impact on lending, at the same time increasing banks’ resilience in case of stress.
The schedule of achieving the target level of countercyclical capital buffer of 1% of risk-weighted assets will be discussed in 2025, taking into consideration the phase of credit cycle and the pace of banks’ recovery of capital buffers.4
1 The Bank of Russia planned to implement positive countercyclical capital buffer in 2022 Q1, however due to introduction of restrictive measures against the Russian Federation, this decision was postponed. In its analytical note published in September 2022, the Bank of Russia stated that CCyB would only be used to accumulate capital buffer in case of simultaneous excessive credit growth in several credit segments.
2 Credit gap is calculated as the deviation of the credit-to-GDP ratio from its long-run trend. The numerator of credit-to-GDP ratio in narrow definition includes loans of banks to corporate and retail borrowers and banks’ exposures to corporate bonds.
3 Data adjusted by dividends payed by banks within one banking group.
4 Capital conservation buffer and systemic importance buffer.
| Zařazeno | pá 30.08.2024 11:08:00 |
|---|---|
| Zdroj | CBRU |
| Originál | cbr.ru/eng/press/PR/?file=638606273564405481FINSTAB_E.htm |
| Kategorie | Financial Stability |
| lang | en |
| guid | docid_39927 |
