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

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

Moody's Puts Russian Banks on Notice For Downgrade

07/23/2012 | 12:52pm US/Eastern

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

React to this article
Latest news
Date Title
06:16a VERIZON COMMUNICATIONS : strike averted, talks to continue
06:11a ROYAL DUTCH SHELL A : Shell shovels millions into proposed Beaver County plant site
06:05a AMAZON : Your favourites
06:04a HONDA MOTOR : More power and passion ; Steve Grant takes the Honda CR-V for a spin
06:04a MANCHESTER UNITED : Chelsea bookies' favourites to retain title ; THE BETTING WEEK AHEAD
05:55a Eden's biomes are the landmark that best defines British skyline
05:54a HONDA MOTOR : Motorcyclist is killed in crash is named
05:54a CN NATIONAL CHEMICAL ENGINEERING : China shows interest in upgradation of 3 paper mills
05:36a GROUPE EUROTUNNEL : French riot police disperse migrants at Channel Tunnel
05:27a GROUPE EUROTUNNEL : French riot police disperse migrants trying to storm Channel Tunnel
Latest news
Advertisement
Hot News 
ANGLESEY MINING : Final Results and annual report
CAMBIUM GLOBAL TIMBERLAND : Appoints Tony Gardner As Chairman
EQUATORIAL PALM OIL : Non-Executive Buys Shares (DIRECTOR DEALINGS)
ENTEGRA FINANCIAL : posts 2Q profit
FAIR VALUE REIT : DGAP-WpÜG: Takeover Offer ;
Most Read News
08/01 CBB CATTLEMEN BEEF PROMOTION AND RESEARCH BOAR : August 2015
08/01 CORRIDOR OF INVESTMENT : 'CPEC will strengthen trade and investment'
08/01 Government of Canada Supports the Upgrade and Expansion of Highway 1 Near Revelstoke
08/01 PAN ASIA MINING : NOTICE OF BOARD OF DIRECTORS’ MEETING
08/01 St. Louis Post-Dispatch Jim Gallagher column
Most recommended articles
04:33a AIRBUS : Iran plans to buy 80-90 Boeing, Airbus planes a year, post sanctions
03:53a Former teenage soldier hatches millions from Chinese egg futures
02:41a Verizon's workers say no strike for now, union talks continue
02:06a Lloyds shareholders question government's sale plan
08/01 Egypt says over half of summit promises turned into projects - planning minister