And again the lists

The Central Bank has counted 40 banks that could become problematic due to private borrowers

The Central Bank has compiled a list of banks to which their private borrowers may not return money. The regulator did not name which credit institutions were at risk. Meanwhile, according to the general director of Moody's Interfax Rating Agency, Mikhail Matovnikov, most likely all the leaders in consumer lending were in the “risk zone” (i.e. Sberbank, Russian Standard, Home Credit and Finance Bank, VTB-24). The bankers themselves say that they are not aware of the existence of any list, and the level of non-repayment of consumer loans remains low in their structures.

As Vladimir Safronov, deputy director of the Central Bank's department of banking regulation and supervision, said yesterday, 40 banks out of the 200 largest in terms of assets were in the risk group. The total share of assets of banks from the risk group is 16% of the assets of the Russian banking system. According to Mr. Safronov, for these banks, failure to repay overdue debt on consumer loans could lead to a decrease in the level of capital adequacy and amount to less than 12%.

Mr. Safronov did not name the banks that found themselves at risk, which greatly pleased the bankers. However, as one of the large Russian banks told the newspaper, the very fact of the appearance of such lists, especially from the regulator, is surprising. “Obviously, this leads to an erosion of trust in retail banks; moreover, as is known, some of them are currently negotiating the sale of part of their business to foreign partners,” says the newspaper’s interlocutor. All the banks that the Vremya Novostei newspaper contacted for comments reported that they had not received any information from the Central Bank regarding this list.

According to the Central Bank, since the beginning of the year, overdue debt on loans issued to the population has increased from 1.9 to 2.5%. The reliability of this data, however, is questionable by the regulator. “The quality of information disclosure by banks, including on consumer loans, is a sore point for the Bank of Russia,” Mr. Safronov said yesterday. -- Overdue debt for this type of loans from non-resident banks, presented in their reports, is 4-5%. For Russian banks this figure is two times lower. Either our banks have good scoring systems, or they have problems with reporting. I'm leaning towards the second option."

According to the head of Sberbank Andrey Kazmin, the volume of overdue debt in his bank is less than 1%. According to the consolidated IFRS statements of the Russian Standard group, last year the share of overdue loans was only 3.5%. But at Home Credit and Finance Bank, whose owner is the Czech Home Credit Group, for the first quarter the share of overdue payments was 14%.

However, even a high amount of arrears does not necessarily lead to a decrease in the level of capital adequacy. “Consumer lending is initially considered the most risky, which is why banks issue such loans at the highest interest rates,” says Mr. Matovnikov. - So even with a large delinquency, financial institutions can be profitable and have high capital adequacy. It is not entirely clear what methodology the Central Bank used to evaluate. But if the Central Bank has really identified problem banks, then most likely preventive regulatory measures should be applied to them, for example, requirements to improve the quality of risk management of the loan portfolio,” he says. “After all, the Central Bank must not only deal with the consequences of crises in the banking system, but also to prevent the very possibility of their occurrence.”

Meanwhile, as the first deputy chairman of the Central Bank, Alexey Ulyukaev, said in early June, since delinquency rates are relatively low and do not have a significant impact on the banking sector, therefore, there will be no tightening of supervision over banks yet.

Natalia ROMANOVA