Updated August 4, 2008

   In June five largest Russian banks demonstrated the biggest slowdown of assets growth since early year.

Gazprombank that decreased volume of facilities placement at the interbank lending market, and Bank of Moscow that reduced corporate credit portfolio provided this fall. At the same time, assets of mid-seized banks that had received access to relatively inexpensive foreign loans in 2Q demonstrated marked growth.

   On August, 1 Bank of Russia has posted on its official website "Review of banking sector of the Russian Federation", and it comprises activ ity results of lending institutions for June. According to the updated data, growth rates of the banking system assets have slowed down in June: assets have increased by 2,8% instead of 3,3% in May, when the record growth has been fixed.

   Banks of top five

had considerable influence over dynamics of assets change for June (according to the data of Dengi journal, as of January 1, 2008 the Savings Bank, VTB, Gazprombank, Bank of Moscow and Alfa Bank were placed the first five by equity capital size). In June their assets growth has slowed down: as compared to May it has totaled 42,2% (in May increase was 42,9%, in April – 42,5%). In their turn, Gazprombank and Bank of Moscow provided growth rates decrease of the top five. Assets of the former went by RUR 63 billion down, and totaled RUR 923 billion by June-end.

It resulted from reduction of facilities stake that bank had placed at interbank lending market to RUR 188 billion a month.

In Gazprombank refused to explain reasons of interbank loans' volume reduction.

   Bank of Moscow reduced assets by RUR 1 billion to RUR 595 billion, and in the previous months an increase was at RUR 20-30 billion level a month.

The core reason is volume reduction of legal entities lending by RUR 4 billion (thus, retail lending has grown by RUR 3 billion). "It can be explained by loan repayment by a large client listed among corporate borrowers of Bank of Moscow", supposes deputy head of Sovlink Company analytical department Olga Belenkaya.

   "Other three banks from the top five demonstrated assets growth: the Savings Bank – by RUR 131 billion, VTB Bank – by RUR 14,5 billion, Alfa Bank – by RUR 15 billion", calculated analyst of Trust investment bank Maxim Biryukov.

Thus, the May indices of the Savings Bank and VTB were better: increase at RUR 148 billion and RUR 118 billion respectively (Alfa Bank assets grew by RUR 3 billion in May).

   Slowdown of assets growth of top five was compensated by its acceleration at mid-sized banks: lending institutions placed from 6 to 20 increased their assets by 21,6% (in May – by 21,5%), and banks placed from 21 to 50 increased this index by 13,7% instead of the May ones – 13,3%. "Marked assets growth of banks from top 200 is explained by easy access to loans on the world financial markets", considers top-economist of Trust investment bank Yevgeny Nadorshin. "Mid-seized banks started to attract more participation loans", adds Olga Belenkaya.

According to her, mid-seized banks demonstrated better results due to growth acceleration of liabilities in 2Q as well.

"Redistribution of retail deposits towards mid-seized banks took place, and the latter, in terms of intense price competition, were forced to increase deposits rates", considers Mrs. Belenkaya. So, in May-June ruble deposit rates were increased by Vozrozhdenie Bank – by 11% maximum, and Promsvyazbank – by 11,5%. VTB-24 Bank is the largest bank that has had the last increase – by 11%, but it has been already in July.