FACTBOX-Russia's banks struggle with bad loans

MOSCOW, July 1 (Reuters) - Russian bank profits could be erased in 2009 if bad loans rise to 10 percent of credit portfolios.

Following are the latest news items on this issue and links to Reuters stories covering recent government and industry forecasts for the banking industry.

GOVERNMENT AND CENTRAL BANK FORECASTS

June 30, 2009 - Russia will spend 210 billion roubles ($6.75 billion) or around 0.5 percent of its 2010 GDP on recapitalising the banking system via OFZ treasury bills, Finance Minister Alexei Kudrin says.

June 29 - Russian Prime Minister Vladimir Putin tells state banks to boost lending by around $15 billion over the next three months as bad loans rise [ID:nLT723598]

June 26 - Central bank Chairman Sergei Ignatyev says the chances of the country facing a second wave of banking crisis were "negligible". [ID:nLQ404794]

June 22 - Ignatyev has said bad loans and stagnation on credit markets were his main tasks in the mid term. [ID:nLM6450]

June 19 - Russia plans to cut off recapitalisation funds to all but its biggest banks under a new draft law. [ID:nLJ220449]

June 9 - Stress tests showed the outlook for non-performing loans as of year-end 2009 improving slightly from forecasts given three months before, the head of the central bank's banking supervision department Alexei Simanovsky said. [ID:nL9304302]

June 7 - Russian officials sent mixed signals about the health of the country's banks, first denying, then admitting stress testing has been carried out and giving differing answers about what it showed. [ID:nL6109314]

June 5 - Russian President Dmitry Medvedev ruled out creating a 'bad bank' to clean up failed loans. [ID:nL534983]

May 22 - The share of non-performing loans may climb to 20 percent by the end of 2009, Russian deposit insurance agency chief Alexander Turbanov said, in the gloomiest forecast from officials to date. [ID:nLM954063]

May 20 - Russia's banks will need at least $15.65 billion of extra capital if non-performing loans stand at 10-12 percent this year, Alexei Simanovsky said. [ID:nLK55866]

April 6 - Russian bank assets shrank for the first time in more than three years in February, while bad loans rose 94.5 billion roubles to 2.8 percent of the total credit portfolio, data showed. [ID:nL6670400]

March 25 - Russian banks can count on further state help should bad loans rise to 10 percent, forcing them to make provisions of $45 billion, officials said. The central bank said recapitalisation is still preferred to a bad bank.[ID:nLP675712]

BANKER AND ANALYST COMMENTS

June 30, 2009 - Pyotr Aven, president of Alfa Bank, Russia's largest private bank, says the government must boost its bank recapitalisation plans to 10 percent of gross domestic product as defaults may hit $130 billion in the next 12 months. [ID:nLU501949]

June 30 - Russian banks require between $20 billion and $80 billion in additional capital within a year as non-performing loans will reach between 15 percent and 40 percent of banks' loan portflio by year-end, Fitch said. [ID:nLU368648]

June 1 - Russian banks may need around 1.3 trillion roubles ($41.51 billion) for recapitalisation in 2009, Moody's said, predicting capital erosion would be the major trigger for rating downgrades. [ID:nL1554029]

May 19 - Problem loans could soar to 35-50 percent of total lending in Russia, Ukraine and Kazakhstan, though actual loan losses will be no more than half that level in Russia, Standard & Poor's said. [ID:nLJ957879]

SBERBANK

June 25 - Sberbank has made provisions for bad loans exceeding 7 percent of its portfolio, while 3 percent have already gone sour. [ID:nMOS007448]

June 24 - Sberbank said restructured loans accounted for over 5 percent of its corporate loan book at the end of the first quarter. [ID:nLO342446]

June 23 - Sberbank (SBER03.MM) will show a small net profit in 2009, and will not need fresh capital in next 12 months, the bank's CFO has said [ID:nLN323511]

May 20 - Sberbank says provisions against bad loans could show short-term spikes as high as 20 percent of the total portfolio in 2010, but the bank could still post profits. [ID:nL0377845]

February 18 - Sberbank expects provisions to reach 5.0-7.5 percent by the end of 2009 and will need to seek fresh capital if provisions rise to 11-12 percent of loans. [ID:nLI807077]

VTB

June 29 - VTB will likely make a loss this year, as provisions rise while bad loans have climbed to 6 percent of its total loan portfolio at the moment. The bank has said it may need another share issue in 2010. [ID:nLT624294] [ID:nLT718543] [ID:nLT16910]

June 19, 2009 - VTB said bad debts within the bank could rise to $9 billion by June 2010. [ID:nLJ543168]

April 21 - VTB has already restructured 15 percent of its loan portfolio and sees "problem debt" at around the 7 percent mark, the bank's head Andrei Kostin said. [ID:nLL49618]

April 3 - Bad loans will not exceed 8 percent of VTB's portfolio this year, says Chief Executive Andrei Kostin said. [ID:nL2952652]

February 12 - VTB sets up a debt centre to manage bad loans but says it has no plans to spin them off into a "bad bank". [ID:nLC24585]

ALFA BANK

April 21, 2009 - Alfa Bank, the country's largest privately owned bank, has restructured around 5 percent of its total loan portfolio and expects overall lending to decrease this year. [ID:nLL49618]

April 16 - Alfa Bank expects no profit for 2009 as provisions for bad loans soar, bank President Pyotr Aven said. [ID:nLG251190]

For an analysis on Sberbank (SBER03.MM) and VTB (VTBR.MM) earnings performance for 2009 year as bad loans rise see [ID:nLU633039]

For an analysis on the possibility of a Russian-style "bad bank" see [ID:nLO139164] (Compiled by Dmitry Sergeyev; Editing by Toby Chopra)