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 / ForexCryptocurrenciesEconomic 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 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 [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"
05:32aVIKTOR VEKSELBERG : Sanctions-hit Vekselberg repays 1 bln Sfr credits to Western banks
RE
05:02aEU COULD COMPENSATE FIRMS HIT BY U.S. SANCTIONS OVER IRAN : French minister
RE
04:40aNOC NATIONAL OIL : Mellitah Oil & Gas... Tender No 888
PU
04:40aNOC NATIONAL OIL : Mellitah Oil & Gas ...Tender No-884
PU
04:40aNOC NATIONAL OIL : Mellitah Oil & Gas ...Tender No-885
PU
04:40aNOC NATIONAL OIL : Mellitah Oil & Gas ...Extend tender NoTender No-876
PU
04:40aNOC NATIONAL OIL : Mellitah Oil & Gas ....Extend Tender No 881
PU
04:25aJÜRGEN KLOPP : We won't change for Real Madrid
PU
03:55aIRAN OIL MINISTER : All new decision in OPEC needs unity
PU
01:44aU.S. sanctions on Iran threaten vital Afghanistan trade project
RE
Latest news "Economy & Forex"
Advertisement