27 Aug 2009 13:45

Past-due debt at 5.4% of Russian banking sector loan portfolio on Aug 1

NIZHNY NOVGOROD. Aug 27 (Interfax) - Past-due debt on loans accounted for 5.4% of the Russian banking sector's portfolio as of August 1, a Central Bank official said.

"Growth in past-due debt is on the wane," Mikhail Sukhov, director of the CB's Department for Licensing and Financial Recovery, told reporters on the sidelines of the Tenth Russian Banking Forum in Nizhny Novgorod.

Sukhov said the CB's best-case scenario for 2009 was for past-due debt to be less than 9%-10%, and its worst-case scenario was more than 10%. The quality of the banking sector's credit portfolio will depend on two factors - the rate of economic revival and the regulatory environment, he said.

He said past-due on retail loans was 5.9% and that on corporate loans was 5.3% as of August 1.

Earlier reports said overall past-due debt accounted for 4.2% of the loan portfolio of Russian banks at the end of the first half of 2009, including 5.7% on retail loans and 4.8% on loans to the non-financial sector.

"Going by the current economic situation, the banking sector will not receive additional aid on top of the measures that have already been announced," Sukhov said.

Sukhov also said banks had provisioned 1.6 trillion rubles for bad loans as of August 1.

"The provisions cover the retail loan portfolio by 11% and the corporate portfolio by 7.9%," he said, adding that the CB was generally satisfied with these figures.

The CB has said that banking sector provisions totaled 1.023 trillion rubles as of January 1, 2009 and 1.573 trillion rubles as of July 1, 2009.

In addition, Sukhov said the CB believed 73 banks could expect to be recapitalized with Federal Loan Bonds (OFZ), although banks had not yet applied for this because not all the legal formalities for those applications had been finalized.