Transcript Garegin Tosunian, President of the Association of Russian Banks

BANKIZATION
OF RUSSIA AND
ECONOMIC GROWTH
Garegin Tosunyan
Liechtenstein
July 2, 2007
Commonwealth of Independent States
on the World Map
CIS territory –
22,1 mln. sq. km.
Population –
279,7 mln. inhabitants
The territory of Liechtenstein –
0,00016 mln. sq.km. (160 sq.km.)
Population –
0.034 mln. inhabitants (34 thous.)
Swiss territory –
0,041 mln. sq.km. (41 thous. sq.km.)
Population –
7.56 mln. inhabitants
Territory of CIS countries, thous. sq. km .
1.Russia – 17075,4
2.Kazakhstan – 2724,9
3.Ukraine – 603,5
4.Turkmenistan – 491,2
5.Uzbekistan – 448,9
6.Belarus – 207,6
7.Kyrgyzstan – 199,9
8.Tajikistan – 143,1
Population of CIS
countries, mln. inh.
1.Russia – 142,8
2.Ukraine – 46,7
3.Uzbekistan – 26,3
4.Kazakhstan – 15,2
5.Belarus – 9,8
6.Azerbaijan – 8,4
7.Tajikistan – 6,9
8.Turkmenistan – 6,7
9.Kyrgyzstan – 5,1
10.Georgia – 4,4
11.Moldova – 3,9
12.Armenia – 3,2
9.Azerbaijan – 86,6
10.Georgia – 69,7
11.Moldova – 33,8
12.Armenia – 29,8
2
Russian economy continues to develop
Results of the I quarter of 2007 (in % to I quarter of 2006)
Real income
of the population
+ 13 %
Real wages
+ 18,4 %
Consumer prices
+ 3,4%*
Industrial production
+ 8,4 %
GDP
+ 7,9 %
Investments in
the fixed capital
+ 20,1 %
4,5 trln roubles
export + 5,3 %
USD 71 bln (the share of fuel and energy
products makes 78%)
Source: Ministry of Economy
* Compared to December 2006.
Import + 36,8% USD 42,4 bln
3
«Hot Buttons» of the Banking System of Russia
assets
banks’ assets
Russia < U.K. 22-fold
< France 15-fold
< Germany 17-fold
banks’ assets to GDP
Russia < U.K. 10-fold
< France 7-fold
< Germany 6-fold
capital
banks’ capital
Russia < EU 29-fold
< USA 14-fold
< Germany 8-fold
banks’ capital to GDP
Russia < U.K. 4-fold
< France 3-fold
< Germany 3-fold
FALLING BEHIND
terms of credits:
credits for enterprises > 3 years
in Russia – 28%
in EU – 52%
supportability:
number of banking offices
per 100 thous. inhabitants
Russia < Austria 4-fold
< France 3-fold
4
CIS and Swiss Banks’ Assets
2191
Assets, bln. euro
414
3,2
A
ba
zer
n
ija
10,7
1,1
2,2
58,7
0,62
1,1
0,5
58,9
e
n
n
n
ia
us
va
nia
ain
sta
sta
ista
do
lar
r
z
org
h
l
me
d
e
e
k
y
i
o
k
r
j
B
G
U
rg
A
M
za
Ta
Ky
Ka
d
a
ssi
lan
r
e
Ru
i tz
Sw
770%
Assets/GDP, %
21%
a
n
eni
ija
a
m
erb
Ar
Az
37%
39%
20%
rus
la
Be
28%
44%
27%
76%
n
n
n
ine
ova
st a
st a
sta
a
i
d
r
z
l
h
d
y
ji
Uk
rg
Mo
zak
Ta
Ky
Ka
ia
org
Ge
95%
54%
a
nd
ssi
u
rla
e
R
z
it
Sw
5
CIS and Swiss Banks’ Capital
73,3
Capital of banks, bln. euro
50,0
0,5
an
ij
ba
r
e
Az
0,2
1,9
6,3
0,4
0,1
0,2
2,0
a
va
ine
gia
rus
tan
tan
tan
o
eni
a
r
s
s
s
a
i
l
r
d
z
o
h
l
m
jid
Be
Ge
Uk
rgy
Ar
zak
Mo
Ta
Ky
Ka
7,1
a
d
ssi
an
l
u
r
e
R
itz
Sw
Capital/GDP, %
5%
3%
7%
10%
7%
26%
9%
7%
5%
4%
n
a
va
ine
tan
gia
tan
tan
rus
ij a
o
s
s
r
eni
a
s
i
a
a
d
z
l
o
r
h
l
d
m
b
y
ji
Be
er
Ge
Uk
Ar
Mo
z ak Kyr g
Ta
Az
Ka
6%
d
a
lan
s si
r
u
e
R
itz
Sw
6
Financing Economy
Banking credits to the economy
(% to GDP)
56%
46%
Credits to enterprises by maturity
51%
18%
54%
31%
20%
Kazakhstan
19%
Ukraine
2002
20%
Bulgaria
RUSSIA
17%
Turkey
25%
19%
28%
Russia
2006
Share of long-term credits
(> 1 yr) to the economy in the total
volume of credits:
•In Kazakhstan – 53%
•In Ukraine – 67%
•In Belarus – 70%
•In Russia – 46%
•In Austria – 70%
(of which > 5 yrs – 57%)
EU
52%
30%
18%
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Monetization of Economies
Monetization of national economies,
134%
М2/GDP, %
96%
76%
51%
39%
an
A
US
zak
a
K
an
t
s
h
inflation
49%
35%
9,0% 9,0%
8,4%
0,2% 3,2%
Jap
М2/GDP
in
a
r
Uk
e
a
ssi
u
R
1,5% 1%
nd
ria
t
a
l
s
Au
zer
t
i
Sw
Growing money supply does not hinder disinflation under sound
monetary policy
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Assets and Liabilities of the Central Bank
of Russia
CBR Liabilities, bln. euro
CBR Assets, bln. euro
114
269
0,2
14 7
funds placed with nonresidents and securities
issued by nonresidents
credits and deposits
Russian government securities
other assets
88
35
53
cash in circulation
Russian government funds
funds of credit institutions
other liabilities
EFFECTIVENESS OF INVESTMENTS
Return on the CBR Currency Reserves
Assets in 2006, % per year
4,87%
4,13%
2,58%
Annual interest rate on
foreign loans for Russian
borrowers
makes 6 -10%
0,33%
USD
Euro
UK pounds
yena
9
Sky-rocket of the Private Sector’s External Debt
140
120
100
100
80
65,2
60
39,2
40
20
19,5
Foreign Investments into Russian
Banks, $ bln.
122,9
80
60
60
40
26
21,5
USD bln.
120
27,7
0
37,3
16
20
0
2003
2004
150
2005
132,8
116,7
100
50
0
2006
2003
2007
External Debt of the Russian Federation
in 2006, $ bln.
200
USD bln.
USD bln.
140
Foreign Investments by Russian
Banks, $ bln.
21,5
7,7
2000
22,4
9
2001
103
23,9
11,3
2002
96,8
33,8
14,2
2003
98,2
55,1
24,9
2004
159,5
125
97,2
75,7
32,3
2005
2004
71,1
50,1
2006
101,2
45,1
2005
2006
2007
state authorities
banks (excluding capital
participation)
other sectors (excluding
capital participation)
2007
RF external debt as of 01.01.2007 – $309,7
bln.
10
Required Reserves Throughout the World
Reserve Requirements in USA
70
и выше
10%
60
$ mln.
50
45,4
48,3
47,6
45,8
40
30
3%
20
10
6,6
0
2004
%
4
3,5
3
2,5 2
2
1,5
1
0,5
0
2004
7,8
7
8,5
0%
2005
2006
2007
Reserve Requirements in EU
3,81
2,7
2,29
<100 thous. euro - 0%
deposits and
sequrities > 2 years and REPO - 0%
interest on reserves - 3,82%
2005
2006
2007
NO RR in:
•Canada
•Great Britain
•New Zealand
•Sweden
•Australia
•…
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Required Reserves Ratios in Russia
Required reserve ratio on
credit institutions’
liabilities to non-resident
banks in rubles and
foreign currency
Required reserve ratio on
liabilities to individuals in
rubles
Required reserve ratio on
credit institutions’ other
liabilities in rubles and
foreign currency
8.07.04-31.07.04
-
3,5
3,5
01.08.04-30.09.06
2
3,5
3,5
01.10.06-30.06.07
3,5
3,5
3,5
01.07.07-
4,5
4,0
4,5
RR to Assets, %
1,5%
0,7%
0,4%
США
ЕС
before 01.07.07
РФ
after 01.07.07
1,7%
To expand the financing
of the Russian economy it is
necessary to:
•low down RR ratios
•exclude time deposits from RR
calculation
12
Refinancing Rate as an Instrument of the
Monetary Policy
Federal Funds Rate in USA, %
%
6
5
4
5,25
5,25
july.06
jan.07
4,25
3
3,25
2
1,25
2,25
1
july.04
14
jan.05
july.05
jan.06
Refinancing Rate of the CBR, %
%
13
12
13
13
13
12
11
11,5
10
11
10,5
9
jul.04
jan.05
jul.05
jan.06
jul.06
jan.07
feb.07
10
jun.07
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Bankization of Russia
BANKIZATION means:
COMPETITIVENESS means:
•“Saturation”
with
credit
resources
•Increasing capitalization
•High capitalization
•Reduction of interest rates
•Availability
of
Russian
financial
•Protection of creditors’ rights
resources
•Availability of services
•Low
interest
rates
•Resource base enlargement
•Geographical
accessibility
•Regional infrastructure
•Significant middle class
development
•Low inflation
•Governance quality
improvement
14
Targets for Competitiveness Growth
As of 01.01.2007
Targets for 01.01.2009 according to the
Program of Bankization
21,6%
50%
11-22%
3-6%
35%
50%
0,08% of the
CBR assets
15-20% of the CBR assets
assets/GDP
53%
86%
capital/GDP
6,4%
13%
credits for non-financial
sector/GDP
credits interest rates
monetization level (M2/GDP)
refinancing by CBR
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Ассоциация российских банков
BANKIZATION
OF RUSSIA
=
TO CREDIT,
NOT TO DISTRIBUTE
www.arb.ru [email protected]
+7 495 2916630
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