Log in
Login
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesHot NewsMost Read NewsRecomm.Business LeadersCalendar 

Moody's Puts Russian Banks on Notice For Downgrade

share with twitter share with LinkedIn share with facebook
share via e-mail
0
07/23/2012 | 06:52pm CEST

By Alexander Kolyandr

MOSCOW--Moody's rating firm on Monday warned that banks in Russia and other former Soviet republics could face a downgrade if the euro crisis worsens.

The firm said it may lower the credit ratings of these banking systems if the probability of its adverse scenario increases.

Under that scenario, the economy would contract 5% in yearly terms over the next 10 to 12 months while the ruble would shed 30% of its value, making one of every four loans nonperforming.

Credit growth in this scenario amounts to 5% and will be mostly concentrated at state banks, the agency said, drawing parallels with the 2008-2009 financial crisis.

The adverse scenario could be triggered by an escalation of the euro area debt crisis. If it happens, Moody's said, most of the region's banking systems would report capital ratios lower than regulatory minimums.

The agency said that is less likely than its central scenario.

That scenario envisages Russia's economy growing 3.5% yearly in the next 12 to 18 months, a 10% ruble depreciation--which, the agency noted, has already happened--and a 15% growth in loan books.

Under the central scenario, Russian and CIS banks' capital positions would remain above the 8% to 10% regulatory minimum level for each country by year-end 2012.

Moody's attributes this to healthy recurring revenues and adequate loan-loss provisions. Nevertheless, Moody's doesn't expect that banks will increase their provisioning coverage in line with asset quality deterioration, and expects banks to opt for problem-loan restructuring as they did during the 2008-2009 crisis.

Write to Alexander Kolyandr alexander.kolyandr@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news
Date Title
12:01a Westinghouse General Counsel Issues Statement on CB&I Legal Proceeding
07/25 MTPCONNECT : Unveils 10-Year Plan to Boost Competitiveness of Medtech, Biotech and Pharmaceutical Sector
07/24DJCash-Strapped Governments Enjoy a Windfall in Low Borrowing Costs
07/24 BRIEF : Burlington hosting job fair in the Falls
07/24 RENAULT : Brands take on used goods with cheap, quality products
07/24 TOTAL KENYA : Uber enter deal to reduce fuel costs for drivers
07/24 PUBLIX SUPER MARKETS : Week before deadline, Tallywood tenants slowly clearing out for Publix
07/24 IDEX : Mohamed bin Zayed names IDEX 2017 committee's chairman, members
07/24 EDITORIAL : 50 million animals in 10 counties? That's big
07/24 MILITARY REC : Best of the Best boxing tourney returns to Bragg
Latest news
Advertisement
Hot News 
-7.47%BANCO DE SABADELL : Profit Falls on Loan Losses
7.29%ACACIA MINING : sees full year output at or above top end of guidance
4.80%STANLEY BLACK & DECKER : Names New CEO, Raises Guidance
-6.75%PAYPAL : Visa profit tops estimates on higher payments volume
-2.57%HONEYWELL : Cuts Revenue Guidance
Most Read News
06:01p Westinghouse General Counsel Issues Statement on CB&I Legal Proceeding
01:50pDJVERIZON COMMUNICATIONS : Finalizes $4.8 Billion Yahoo Deal
12:08a VOLKSWAGEN : No More Diesel Cars for US, Says Volkswagen
Most recommended articles
05:54pDJCash-Strapped Governments Enjoy a Windfall in Low Borrowing Costs
04:09pDJVERIZON COMMUNICATIONS : Finalizes $4.8 Billion Deal to Acquire Yahoo -- Update
12:33p GM re-evaluates India investment, new car platform on hold
12:16pDJApple Is Ripe for a Rally -- Ahead of the Tape
07:53a Melker Schorling, Sweden's quiet tycoon with the Midas touch