Fitch sees ruble rate of above 70/USD troublesome for banks

MOSCOW, Aug 16 (PRIME) -- A ruble rate of above 70 rubles per U.S. dollar may cause problems with capital of some large Russian banks, while the rate of above 80 rubles would mean problems for the bulk of the banking sector, international rating agency Fitch said in a report published on Thursday.

The average capital ratios for the sampled banks decreased by 50–60 basis points in June after payment of 359 billion rubles of dividends, including 271 billion rubles paid by Sberbank and 74 billion rubles paid by VTB Bank. The average Core Tier 1 capital adequacy ratio amounted to 9.8% as of the end of June, the Tier 1 capital adequacy ratio to 10.4% and the Total Capital ratio to 13.8%.

“Our preliminary analysis suggests that a U.S. dollar–ruble rate above 70 (currently 66) could be challenging for a few larger banks, while a rate of above 80 could pose a problem for a wider industry, but we think that in such a scenario the central bank of Russia may become lenient to regulatory capital calculations, as it did in 2014,” the agency said.

The agency also registered the highest outflow of money from corporate deposits of 71 billion rubles from Russian Regional Development Bank in June. The outflow from corporate deposits with UniCredit Bank amounted to 41 billion rubles in the month, from ING Bank to 37 billion rubles, and from Bank Avers to 21 billion rubles. Still, liquidity of the four banks was at a comfortable level.

The agency also registered major inflows of corporate money to Sberbank, Alfa-Bank, and Rosbank in the month, and corporate deposits grew by 309 billion rubles, 39 billion rubles, and 27 billion rubles, respectively.

Deposits of clients with Russian banks mainly grew in June, but B&N Bank and Bank Otkritie Financial Corporation lost 20 billion rubles of money from private deposits, and Bank Rossiya lost 24 billion rubles.

(66.3772 rubles – U.S. $1)

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