Cbank says sees Russia’s risks of foreign liquidity deficit low Dec

MOSCOW, Nov 28 (PRIME) -- Russia is running a low risk of foreign currency liquidity deficit despite a foreign corporate debt repayment peak of U.S. $15.7 billion expected in December, the central bank said in a statement on Tuesday.

“The foreign currency liquidity situation was less favorable in September on the back of foreign currency deposits outflow from large banks. At the same time, the banking sector has enough foreign currency liquidity to cover the expected payments on liabilities in foreign currencies… The risks connected with a possible liquidity deficit in foreign currencies remain at a low level,” central bank said.

The central bank surveyed 23 largest banks and found out that the combined foreign currency liquidity deficit is expected at no more than $1.65 billion in October–December. The combined surplus is expected at $1.1 billion.

The authority said that it can raise the risk coefficient for foreign assets of banks if the foreign currency risk increases. About 25% of corporate loans in foreign currencies, or 2.847 trillion ruble ones, can be qualified for an elevated risk coefficient as of October 1.

The central bank can introduce an anticyclical surcharge if the loan quality deteriorates, the speed of loan issuance surges or dividend payments are hiked.

The level of soured corporate loans has stabilized at about 11.7% on the back of a small increase of the combined loan portfolio. The retail loan quality is growing.

The ruler will continue close monitoring of activities of Vnesheconombank (VEB) because of potential medium-term risks for the capital if the bank fails to sell affiliates Globexbank and Sviaz-Bank.

It separately said that the forecast for the combined net profit of the banking sector for 2017 remains close to 1 trillion rubles.

According to the authority, oil and gas companies bear a high debt burden in foreign currencies. “In the oil and gas industry, despite a low level of the combined tax burden (ruble and foreign currency liabilities are taken into consideration) the level of the debt burden is somewhat elevated as compared with their foreign peers, and in some companies the figures are quite high.”

The central bank is elaborating a mechanism limiting the combined foreign currency debt of companies.

(58.2773 rubles – U.S. $1)

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