Raiffeisenbank says Russian banks need 0.7–1.5 tln rbl more capital

MOSCOW, Apr 5 (PRIME) – The combined need for capital of the Russian banking system ranges from 700 billion rubles to 1.5 trillion rubles, Raiffeisenbank said in a research note on Friday.

“Central bank data show the tier-1 capital adequacy ratio at 12.2% as of February 1, which indicates a signals cushion of 3.4 trillion rubles. Taking into account the reserves, it does not completely cover the loans with indications of impairment, and shows the lack of excessive capital in the banking sector and a probable deficit of capital in some banks even excluding markups to ratios,” the research note read.

“Our estimates show the want of capital at 1.5 trillion rubles or at 700 billion rubles if the collateral can be recovered fully at a price no less than the booked value.”

As of February 1, the amount of shady, troubled, or non-performing loans in portfolios of Russian banks stood at 10.6 trillion rubles, which was only 54% covered by reserves against possible losses.

Russian banks received a combined profit of 180.5 billion rubles in February, down from 264.4 billion rubles in January due to changes in the reserve policy. Also, the banking sector showed a 479 billion ruble increase in overdue corporate loans to 2.57 trillion rubles, which accounts for 7.74% of all loans issued by the banking sector, Raiffeisenbank said.

(65.3281 rubles – U.S. $1)

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