FACTBOX-Russia's banks struggle with bad loans

MOSCOW, April 20 (Reuters) - Russian banks could see their profits erased in 2009 if bad loans rise to 10 percent of credit portfolios, as authorities hope there will be no second wave to the financial crisis.

Following are government and industry forecasts for the banking industry and details Russian banks have released so far about their situations:


April 6, 2009 - Russian banks’ 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]

April 3 - Banks may avoid a second wave of the crisis, this time linked to bad loans, Sergei Ignatyev, the head of the central bank, said. Authorities had several months to examine the possibility of buying out bad assets from banks, he said. [ID:nL3431000]

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 was still preferred to a bad bank. [ID:nLP675712]

March 5 - Non-performing loans will reach 12 percent by the end of 2009, in the pessimistic scenario, while the conservative scenario is for 10 percent, Alexei Simanovsky, head of the central bank’s banking supervision department said. ID:nL5394735]

Jan. 30 - Russia faces the risk of a new wave of instability in the future that may be linked to the non-payment of loans to commercial banks, central bank Chairman Sergei Ignatyev said. [ID:nLU176346]

Jan. 22 - The share of non-performing loans in commercial banks’ loan portfolio will rise to 4.0-4.5 percent, loan provisions will rise to 5.5-6.0 percent by April 1, Simanovsky said. [ID:nLM212744]


March 27, 2009 - Hundreds of small Russian banks could go bankrupt as the level of bad loans is likely to hit 15-20 percent by the end of the year, Alfa Bank President Pyotr Aven said. [ID:nLR556212]

Feb. 6 - Sberbank will suffer a net loss if the share of non-performing loans goes beyond 3.4 percent and for VTB, a 3.5 percent level is the line in the sand, according to UBS estimates. [ID:nLU633039]

Nov. 20, 2008 - Standard & Poor’s ratings agency said the Russian economy and banking sector would suffer for up to two more years, and the share of problem debt may rise to at least 10 percent over the next 12 months. [ID:nLK106076]


March 24, 2009 - Sberbank said its non-performing loans (NPL) were at 2.1 percent of the credit portfolio as of March 1, up from 1.7 percent at the end of January.

The bank said its provision for bad loans was 59 billion roubles ($1.77 billion) in the first two months of 2009. [ID:nLO494092]

Feb. 18 - Sberbank said it expected provisions to reach 5.0-7.5 percent by the end of 2009 and would need to seek fresh capital if provisions rose to 11-12 percent of loans, an executive said. [ID:nLI807077]

Jan. 28 - The NPL ratio for Sberbank increased about 1.6-1.7 percent from 1.52 percent as of Oct. 1 and provisions rose 4 percent, Sberbank CEO German Gref said. Bad loans are likely to soar to 10 percent in Russia’s banking sector by the end of 2010, Gref said. [ID:nLS10599]


April 3, 2009 - Bad loans will not exceed 8 percent of VTB’s portfolio this year, Chief Executive Andrei Kostin said. [ID:nL2952652]

Feb. 12 - VTB set up a debt centre to manage bad loans but said it had no plans to spin them off into a “bad bank”. [ID:nLC24585]

Jan. 28 - Bad loans for VTB totalled about 3.8 percent, and the bank is using forecasts for bad loans of 10 percent for planning purposes, CEO Kostin said.

Jan. 22 - VTB unveiled a $363 million loss for Q3 2009. Provisioning for bad loans rose to 3.8 percent during Q3 2008, while the nine-month level was 2.5 percent, up from 1.3 percent in the year ago period. [ID:nLM638073]


April 16, 2009 - Alfa Bank, Russia’s largest privately owned 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] (Reporting by Dmitry Sergeyev; editing by Karen Foster)