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

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 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 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
07:34p Investigators at Leiden University Report Findings in Clostridium difficile (Detection of Clostridium difficile in Feces of Asymptomatic Patients...
07:34p Patent Issued for Camera and Lens Module (USPTO 9596394)
07:34p CARNEGIE MELLON UNIVERSITY : To Launch Index Measuring Carbon Dioxide Emissions in U.S.
07:34p AIRASIA BERHAD : X celebrates direct flights to Wuhan with 8,888 promotional seats
07:34p CISCO : Live Showcases Public Safety Solutions
07:34p METANOR RESOURCES : Closes private placement $11.5 million
07:34p COM HEM : repurchases own shares
07:33p Commercial Real Estate Stocks Showing Strong Move To The Upside
07:33pDJBrazil's Meatpackers Suffer as Government Struggles to Reopen Export Markets
07:33p DENSO : Patent Issued for Ammonia Synthesis Catalyst (USPTO 9592495)
Latest news
Advertisement
Hot News 
8.08%Investors find some relief in Next's chilly outlook
-4.56%BASIC FIT : core earnings rise on record number of new gym openings
5.37%GVC : to pay second special dividend for 2016 on favourable trading, refinancing
-4.96%IG : quarterly revenue falls 3.8 percent on UK, Ireland weakness
3.44%Brexit delaying major UK infrastructure projects, Kier says
Most Read News
02:23p U.S. shares edge higher as healthcare vote eyed; gold dips
12:27p AKZO NOBEL : finds unwanted suitor PPG on its doorstep
09:24a BP : Britain awards 25 oil exploration licences in frontier tender
04:02a Verizon, AT&T suspend ads from Google over offensive videos
10:50a NEXT : British retail sales suffer biggest squeeze in nearly seven years as inflation bites
Most recommended articles
03/21 UK to investigate any UK banking involvement in 'Laundromat' case
02:30pDJVALEANT PHARMACEUTICALS INTL : CEO Joseph Papa Was Paid $62.7 Million in 2016 -- 3rd Update
02:23p U.S. shares edge higher as healthcare vote eyed; gold dips
02:06pDJAKZO NOBEL : Largest Shareholder Urges Engagement With PPG -- 2nd Update
02:04pDJBHP BILLITON : Union at BHP's Escondida Copper Mine in Chile to End Strike