Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  News  >  Economy & Forex  >  All News

News : Economy & Forex

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors 
All NewsEconomyCurrencies / ForexEconomic EventsPress releases

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 CET

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 [email protected]

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 "Economy & Forex"
10:36a PES PARTY OF EUROPEAN SOCIALISTS : 19/11/2017 PES leaders from the Western Balkans discuss integration
10:26a AMF ARAB MONETARY FUND : High-Level Policy Forum Venture Finance in the Arab World – Accelerating Arab Startups November 20-21, 2017 Amphitrite Palace, Skhirat, the Kingdom of Morocco
10:11a CBI CONFEDERATION OF BRITISH INDUSTRY : 'Investing in skills is at heart of building an economy fit for the future'
10:05a Hammond, under pressure on budget, promises more homes
09:16a CITY OF BREA CA : Holiday Giving Is An Important Brea Tradition
09:06a ERNST & YOUNG LLP : TESARO, Inc. Co-Founders named Entrepreneur Of The Year®
07:16a CFL CANADIAN FOOTBALL LEAGUE : 53rd Vanier Cup matchup set for next Saturday
03:47a 'No fireworks' at NAFTA talks, but few signs of progress
02:16a BRC BRITISH RETAIL CONSORTIUM : RETAIL LEADERS BACK CHANCELLOR TO DELIVER A “SHOPPERS’ BUDGET”
01:46a RECALL : Potential Foreign Matter (Glass/Hard Plastic) in Certain Fresh Salads
Latest news "Economy & Forex"
Advertisement