Over 150 Russian banks keep losing money

14 february 2017 | Rossiyskaya Gazeta

Experts believe that the main problems in the banking system are yet to be uncovered while the rate at which banking licenses are being rescinded in Russia may yet increase further, according to the Rossiyskaya Gazeta.

Daniil Nametkin
Daniil Nametkin
Department for Expert Analytics

“Even though in 2016 the banking sector as a whole increased its profit more than five-fold on the previous year (RUB 930 billion before taxes), over 150 banks are still losing money, 29 of which are in the top 100 in terms of the amount of assets. This to a large extent can be explained by heavy lending to industries in dire financial straits,” Analytical Center expert Daniil Nametkin told a Rossiyskaya Gazeta correspondent. The most problematic sectors include construction with overdue debt accounting for 20% of its total debt and retail, which saw the largest increase in overdue debt in 2016 in absolute terms (+ RUB 52.9 billion) as the real disposable income of the household has been on an uninterrupted downward trajectory for the past 3 years, the analyst noted.

According to Mr. Nametkin, at the moment, 23 banks have overdue debt  that exceeds15% in their total outstanding loans and 17 of these banks are in the top 100 banks of Russia. This means they may face captial shortages.

Source: Rossiyskaya Gazeta