Russian banks may need 10bn as bad loans mount up, says central banker
RUSSIAN banks could need a minimum of £10bn in extra capital this year to offset the damage done by rocketing levels of bad loans, one of the country’s top central bankers said yesterday.
Alexei Simanovsky, who heads the Russian central bank’s supervision department, said stress testing had shown that non-performing loans would force banks to raise new funds.
“Based on the results of the stress tests and on our assumptions (on non-performing loans), banks will need from 0.5 trillion roubles (£10bn) in capital,” he said.
Simanovsky said that non-performing loans in the Russian banking sector, excluding industry giant Sberbank, had reached around four per cent of their credit portfolios by 1 May and could rise to 10-12 per cent by the end of 2009.
However, the first deputy chairman of the central bank, Alexei Ulyukayev, said that Sberbank and rival Russian banking giant VTB were likely to escape the worst of the crisis.
He said Sberbank was not likely to raise new capital via a share issue in 2009, while VTB would not do it before autumn.
The Kremlin is using the two banks as conduits to lend into the Russian economy, with each institution collecting assets which struggling companies can use as collateral to guarantee loans.