Moody’s expects a widening gap between weak and strong banks in Russia
International rating Agency Moody’s expects the gap between the indicators of “strong” and “weak” banks in the Russian Federation in the future will increase, said a senior credit expert financial institutions of the Agency Olga Ulyanova.
She noted that both groups include state banks, private banks and banks with foreign capital.
“The situation in the banking sector stabilized in the average hospital. We are moving into a new cycle of credit growth… but not all banks will be able to benefit from this credit growth from this new stable cycle,” – said Ulyanov, speaking at a conference in Moscow.
She explained that banks need resources and reserves: if the Bank has not solved the problems with the reserves after a crisis, it will work in zero or low profitability. As a result, the Bank will not be able to substitute in its portfolio of non-performing loans new, he said.
“We expect the gap between strong and weak banks will now only increase amid a new economic paradigm when we see low growth, low inflation, and the difficulty of concealing the accumulated inefficiency”, – said Ulyanov.
In late September the Minister of economic development of Russia Maxim Oreshkin said that problems in the banking sector of the Russian Federation has exposed on the background of low inflation. The Minister noted that more sustained low inflation is another mode of operation not only the banking system but also the entire economy. The Ministry also said low inflation will allow Russia to start a long credit cycle.