VTB 24 CEO sees many Russian banks closing in 2015

MOSCOW, Jan 22 (PRIME) -- The number of banks in Russia is most likely to decrease this year, and even some big players may leave the market as the central bank ordered lenders to have capital of no less than 300 million rubles, Mikhail Zadornov, CEO of VTB’s retail unit VTB 24, said in a news briefing on Thursday.

“We expect a decrease in the number of medium-sized, small and large banks in this situation,” Zadornov said.

“I think several dozens of banks have already failed to meet the requirement, this only will decrease the amount of banking licenses at the market.”

But VTB 24 has a very strong reserve of capital, as its capital adequacy stood at 11.7% as of January 1 under current regulations.

“VTB 24 has never worked with such a high capital adequacy, we usually work with a 10.5% capital adequacy…With last year’s profit we’ve created a serious margin of safety …even if the financial result is close to zero,” he said.

“But knowing the situation, I can say that not so many banks have a margin of safety like that, and as the crisis covers every sector of economy, including the banking system…it will be tough, the weakest will have to leave the market, it is the market’s law.”

In November 2014, Central Bank Deputy Chairman Mikhail Sukhov said that 122 banks failed to meet the 300 million ruble regulation as of October 1, 2014 falling short of 7.8 billion rubles.

(65.5558 rubles – U.S. $1)

End