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Russian bank provisions enough for $92 billion bad loans: central bank
September 29, 2017 / 1:26 PM / 19 days ago

Russian bank provisions enough for $92 billion bad loans: central bank

FILE PHOTO: Russian central bank governor Elvira Nabiullina speaks during a news conference in Moscow, Russia September 15, 2017. REUTERS/Sergei Karpukhin

MOSCOW (Reuters) - Russia’s banking sector is carrying bad loans of 5.3 trillion rubles ($92 billion), which accounts for less than 10 percent of the sector’s outstanding loans, Central Bank Governor Elvira Nabiullina told Rossiya-24 TV on Friday.

Russian banks, private ones in particular, are under close scrutiny after the central bank took over two players, Otkritie and B&N Bank, in less than a month.

Nabiullina told the state TV that around 70 percent of bad loans are covered by provisions, which the central bank considers as ‘sufficient’ and posing no concerns for the banking system in general.

“These are figures which have been in place for many years before... We don’t see problems here... Yes, there are problems in the banking sector but this one (bad loans estimate) does not pose a systemic risk,” she said.

Two thirds of bad loans had been taken out by companies and one third by households, Nabiullina said.

The central bank governor added that the central bank would like to sell Otkritie (OFCB.MM) and B&N and was considering arranging initial public offerings for the troubled private lenders once they are back on their feet.

Nabiullina reiterated that the rescue of the two banks did not pose a risk of higher inflation.

Reporting by Andrey Ostroukh and Vladimir Soldatkin; editing by Alexander Smith

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