Moody's warns of low provisions on Russia bad loans

MOSCOW Oct 29 (Reuters) - Ratings agency Moody's expects bad loans at Russian banks to rise to 20 percent of the total portfolio this year and to 25 percent in 2010, it said on Thursday, adding that current provisions were lower than needed.

The agency also said the number of loss-making banks would continue to rise and the overall banking sector profitability will remain low until 2011, while the credit portfolio would rise by 10 percent in 2010, mainly at state banks.

The agency also said it still saw risks of a run on banks if big lenders experienced problems or if the rouble came under new depreciation pressure. (Reporting by Oksana Kobzeva, writing by Dmitry Zhdannikov; editing by Dmitry Sergeyev)